LNG pro­po­nent ties up with Chi­nese firm

Prospec­tive PNOC part­ner

Manila Bulletin - - Business News - By MYRNA M. VE­LASCO

prospec­tive part­ner of staterun Philip­pine Na­tional Oil Com­pany (PNOC) has tied up with a Chi­nese firm on its bid to put up the coun­try’s liq­ue­fied nat­u­ral gas (LNG) im­port fa­cil­ity.

Dubai-head­quar­tered Lloyds En­ergy an­nounced that it has got­ten on its wing China Kaicheng En­ergy Ltd. for the de­vel­op­ment and con­struc­tion of an in­te­grated LNG hub.

Lloyds En­ergy is among the firms that sub­mit­ted let­ter of in­ter­est (LOI) to PNOC on the lat­ter’s search for a strate­gic part­ner to build the coun­try’s LNG im­port ter­mi­nal with a hub com­po­nent – which is ba­si­cally the di­rec­tion that the De­part­ment of En­ergy (DOE) has set for the win­ning party on that pro­pounded gas in­vest­ment ter­rain.

PNOC has been among those short­listed by the DOE for the LNG hub ven­ture that the coun­try will be en­gag­ing it­self into – it be­ing the so­lu­tion to its gas mar­ket re­set fol­low­ing pro­duc­tion de­cline at the coun­try’s Malam­paya gas field.

En­ergy Sec­re­tary Al­fonso G. Cusi in­di­cated that they will se­lect the LNG fa­cil­ity in­vestor by the end of this month – or at least prior to the close of this year.

Apart from PNOC, in the gov­ern­ment’s short­list are First Gen Cor­po­ra­tion of the Lopez group and the joint ven­ture of Davao busi­ness­man Den­nis Uy and China Na­tional Off­shore Oil Cor­pra­tion.

For the PNOC-pro­posed project, it has been eye­ing a prospec­tive site in Batan­gas and its tar­geted tech­nol­ogy shall be an­chored on float­ing stor­age re­gasi­fi­ca­tion unit (FSRU) with ini­tial ca­pac­ity of 3.0 mil­lion tons per an­num.

Lloyds En­ergy said it pur­chased the “in­struc­tions to pri­vate sec­tor par­tic­i­pants-el­i­gi­bil­ity doc­u­ments” and will be at­tend­ing the Novem­ber 16 pre-el­i­gi­bil­ity con­fer­ence sched­uled by PNOC on its se­lec­tion of a strate­gic part­ner.

Based on the num­bers crunched by PNOC and its trans­ac­tion ad­vi­sor Asian De­vel­op­ment Bank (ADB), the scale of in­vest­ment that PNOC will be shelling out for the LNG ven­ture will range from US$600 mil­lion to USS1.4 bil­lion – as it sets an op­tion to build an on­shore LNG im­port fa­cil­ity in the long term.

Be­yond the im­port ter­mi­nal, the big­ger scale plan of PNOC will be to in­vest even­tu­ally in gas-fired plants to serve as an­chor load of the LNG im­port re­ceiv­ing fa­cil­ity. Pre­lim­i­nary tar­gets had been to serve the needs of in­dus­trial zones.

The state-run com­pany also orig­i­nally planned to tie in its ‘banked gas’ in the joint ven­ture ar­range­ment, but the plan had al­ready been ditched and PNOC just opted to sell the gas com­mod­ity sep­a­rately.

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