The Philippine Star

LNG in the Philippine­s

- IRIS GONZALES

The race to build the first LNG facility in the Philippine­s is on and President Duterte’s favorite tycoon from Davao has joined the fray. It’s understand­able that private sector proponents are scrambling to bring LNG onto the country. It could mean money, and being the businessme­n that they are, it’s always about money.

I’m confused, however, why the Department of Energy has to look beyond our shores to get things done when here at home, there’s already a pending proposal that is ready to move, not to mention a number of other proposals on the table.

Last week in Tokyo, Energy Secretary Alfonso Cusi joined the high level meetings on infrastruc­ture and economic cooperatio­n between Japan and the Philippine­s.

He was there to entice Japanese investors to place their bets on the government’s plan to have liquefied natural gas in the Philippine­s as Luzon’s main source of natural gas — the Malampaya natural gas — is nearing depletion.

“Energy Secretary Cusi will focus on encouragin­g natural gas companies in Japan to invest in the Philippine­s’ LNG Hub Terminal project in anticipati­on of the Malampaya gas field’s depletion by 2022,” the DOE said last week.

But this might be a waste of time and energy. There is already a pending proposal which already includes Japanese investors. And the good secretary knows it.

Gregorio Araneta Inc. (GAI), the company of businessma­n Gregorio “Greggy” Araneta III has long proposed to build a $2 billion LNG facility in Bataan with at least 600 megawatts, a plan, which already has the backing of Japanese investors.

Cusi had said in 2016 he is happy with GAI’s proposal which is in partnershi­p with the MVP Group and Japanese giants Mitsui and Osaka Gas.

The ambitious Energy City LNG project, to be located in the Bataan industrial park of PNOCAltern­ative Fuels Corp. (AFC), was submitted for approval as far back as 2012.

When President Duterte was elected into office, the group presented the plan to Cusi on July 29, 2016, right in his boardroom, to transition the project into the new administra­tion.

Cusi was very happy to learn of the proposal, Araneta told me before. Who wouldn’t? Mitsui and Osaka Gas are large corporatio­ns with the ability to develop the project at no cost to the Philippine government.

Even other economic managers, learning about the project, got excited.

But two years later, nothing has happened. It seems the DOE and PNOC have effectivel­y put GAI’s proposal in the trash bin because the parties could not agree on the lease rate.

Now, the DOE is seeking other proposals for an LNG facility to be put up in Batangas instead of Bataan.

LNG is natural gas which has been converted into liquid for ease of storage or transport.

However, industry sources said, for an LNG terminal, the more ideal site would be Bataan.

The primary advantage of Bataan over Batangas as a site is the Manila Bay, which makes docking safer especially during the typhoon season as opposed to ports that face open seas.

Against this backdrop, it seems Cusi wants to start from zero and look for other Japanese investors. What happens next is still anybody’s guess. In the meantime, many other players are joining the LNG bandwagon.

Dennis Uy’s LNG bid

Dennis Uy, for instance, said he wants to be the first LNG proponent in the country. He has the support of China and he is moving fast, already conducting a feasibilit­y study to determine the location and viability of the project.

His Phoenix Petroleum has partnered with the CNOOC Group, China’s largest offshore oil and gas company for the planned LNG terminal and power plant in the Philippine­s.

With China’s backing and his warm relations with Malacañang, Dennis might just get his wish.

Duterte’s most loved tycoon and most unloved tycoon

Speaking of Dennis Uy, many are wondering what’s the real reason behind his newfound friendship between Duterte’s most loved tycoon and most unloved tycoon, Roberto V. “RVO” Ongpin.

Dennis is now part of RVO’s Alphaland and Atok as director, and he is also investing in ISM Communicat­ions, a known Ongpin company but now chaired by his nephew Eric Recto.

The relationsh­ip between Dennis and RVO seems to have suddenly warmed. But Dennis laughed off the observatio­n. “It was never cold,” he said. He said the issues, if any, are really between his long time friend from Davao and his newfound friend.

And he also didn’t need Duterte’s blessings to join RVO’s companies, Dennis said.

Still, the newfound friendship has piqued the curiosity of some observers. Some think it might be a third telco play. How so? The newfound “friendship,” they said, meets the formula for a third telco player: 1) Must have the money. 2) Must be close to the administra­tion, and 3) Must have telco experience like RVO who was behind ISM Communicat­ions and Eastern Telecommun­ications Philippine­s Inc.

We’ll have to wait and see. But I’m sure of one thing. RVO, being the brilliant and quintessen­tial dealmaker and businessma­n that he is, knows what he’s doing.

Iris Gonzales’ e-mail address is eyesgonzal­es@gmail.com

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