Uy-CNOOC tandem secures DOE final approval on $2-B LNG projects
The Department of Energy (DOE) has granted its final approval to the US$2.0-billion integrated liquefied natural gas (LNG) import facility and power plant projects of Davao businessman Dennis Uy in tandem with China National Offshore Oil Corporation (CNOOC) which shall be concretized under corporate vehicle Tanglawan Philippines LNG, Inc.
The go-signal of the government was extended through the notice-to-proceed (NTP) project approval scheme of the DOE for the downstream natural gas sector of the country.
Energy Undersecretary Donato D. Marcos, who chairs the centralized review and evaluation committee that scrutinized the project proposal prior to Energy Secretary Alfonso G. Cusi’s final approval, indicated that Tanglawan will be investing US$1.0 billion for the LNG terminal; and US$1.0 billion initially for the power plant component.
In a disclosure to the Philippine Stock Exchange (PSE) of Uy’s firm Phoenix Petroleum Philippines, Inc., it has been indicated that Tanglawan “plans to break ground by 2019 for the regasification and receiving terminal.”
The LNG import facility, it has been emphasized, will have a capacity of 2.2 million tons per annum (mtpa) and the targeted commercial operations will be by year 2023.
The green light extended by the DOE to the projects will also incorporate gas-fired power plant developments with up to 2,000 megawatts of installed capacity.
The LNG ventures, it was noted, will likely be cemented between Uy’s Phoenix Petroleum and CNOOC Gas and Power Group Co. Ltd.
Beyond this tandem, it is also eyed that business magnate Manuel V. Pangilinan will be joining the project development – basically firming up an earlier invitation that was extended to him by Uy when they first sealed a tie-up on oil and gas exploration venture at the Recto Bank along offshore Palawan basin.
Pangilinan indicated keenness to join the partnership, although the equity sharing is a matter that the relevant parties have yet to negotiate and agree on.
With Pangilinan’s entry into the consortium, bids for capacity off-take relative to the power plant projects may be reinforced because of the former’s stronghold on the country’s biggest power utility Manila Electric Company.
Many of the prospective LNG project developers in the country have dilemmas on securing off-take or power supply agreements on their generated electricity – and that has a “dampening effect” on their targeted ventures.
For Meralco, in particular, its need for gas-generated power capacity is rooted on its system’s requirement for mid-merit capacity – or that portion of supply that could easily be ramped up and down with every fluctuation of electricity supply-demand in its network.
Phoenix Petroleum noted “the LNG facility will help support the demand for a clean, low cost and environmentfriendly energy source in Luzon and contribute to the sustainable development of the Philippine economy.”