12 for­eign firms eye Malam­paya banked gas

The Philippine Star - - BUSINESS - – Danessa Rivera

There is strong in­ter­est to buy the gov­ern­ment’s un­used Malam­paya nat­u­ral gas, or the so-called banked gas, as state-run Philip­pine Na­tional Oil Co. (PNOC) re­ceived pitches from at least 12 for­eign com­pa­nies, its top of­fi­cial said.

PNOC re­ceived around a dozen un­so­licited pro­pos­als to mon­e­tize the banked gas, its pres­i­dent Reuben Lista said on the side­lines of a Se­nate hear­ing.

“What we want is to mon­e­tize the banked gas so we won’t need to make a loan for our planned liq­ue­fied nat­u­ral gas (LNG) hub. There are around a dozen se­ri­ous ones for the banked gas,” he said.

This was stated in the doc­u­ment sub­mit­ted to House Mi­nor­ity Leader and Que­zon Rep. Danilo Suarez, where PNOC has out­lined its plans for the banked gas.

In PNOC’s first op­tion, it plans to trade the banked gas out­side the coun­try, which is an off­shoot of a re­al­iza­tion that lo­cally sell­ing the banked gas may “pose some dif­fi­culty” with ex­ist­ing gas sales and pur­chase agree­ments (GSPAs), with the ear­li­est ex­pir­ing in 2022.

Its sec­ond op­tion, mean­while, is to ex­tract the banked gas and burn then sell it in the form of elec­tric­ity, which is more vi­able.

PNOC said it is im­per­a­tive to ex­tract and fully re­cover the re­main­ing pur­chase cost as well as op­ti­mize its po­ten­tial value at the ear­li­est time pos­si­ble, cit­ing that the Malam­paya gas field is ex­pected to be de­pleted by 2024.

How­ever, De­part­ment of En­ergy (DOE) Sec­re­tary Al­fonso Cusi said PNOC must present the jus­ti­fi­ca­tion for its banked gas op­tions.

“That has to go through board eval­u­a­tion. The man­age­ment are look­ing at that op­tion that we sell it, or ex­tract, burn it and sell it as elec­tric­ity,” he said.

Lista also said the com­pany has to jus­tify its plans to mon­e­tize the banked gas and the de­vel­op­ment of the LNG hub with the Na­tional Eco­nomic and De­vel­op­ment Au­thor­ity (NEDA) and Com­mis­sion on Au­dit (COA).

“NEDA will not ap­prove the (LNG) project if we’re go­ing to take a loan. We have the banked gas as our eq­uity, that is the di­rec­tion we are try­ing to adapt. We’re go­ing to find a part­ner will­ing to mon­e­tize the banked gas,” he said.

“On the other hand, COA will ask us how the part­ner was cho­sen. I have to jus­tify that. We are an­swer­able to the gov­ern­ment and money of the peo­ple,” the PNOC of­fi­cial said.

PNOC was tasked to put up an in­te­grated LNG hub with stor­age, liq­ue­fac­tion, re­gas­si­fi­ca­tion and dis­tri­bu­tion fa­cil­ity, as well as a re­serve ini­tial power plant ca­pac­ity of 200 MW.

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