PNOC signs deal with US firm for LNG project
State-run Philippine National Oil Company (PNOC) has inked a deal with American firm New Fortress Energy LLC (NFE) for the setting up of liquefied natural gas (LNG) installation in the country.
In a statement to the media, the Department of Energy (DOE) qualified that the memorandum of understanding (MOU) between the parties remains non-binding, and the actual terms for any future definitive agreement on the planned LNG infrastructure investments have yet to be firmed up.
The MOU was signed through a virtual event on October 14 (Wednesday) between PNOC President and CEO Reuben S. Lista and New Fortress Chairman and CEO Wes Edens; and it was witnessed by Energy Secretary Alfonso G. Cusi.
In their preliminary agreement, PNOC and Nasdaq-listed NFE “will work together to identify potential opportunities to accelerate the development of important LNG and power infrastructure in the country.”
As emphasized, this shall be leveraged on “future investments to build a new and durable LNG value chain in the Philippines capable of generating jobs, revenue and opportunity far beyond prospective terminal or power plant sites.” Nevertheless, the parties have not fully identified which specific part of the LNG supply chain they will be investing in; and what timelines they have been targeting on project implementations.
Cusi, who is ex-officio chairman of the PNOC Board, said this recent development is a step forward in the country’s “intensified efforts to ensure the country’s energy security with the expected depletion of Malampaya.”
The energy chief is raising hopes that the PNOC-NFE partnership “would bear fruit that would redound to the advantage of our people.”
The Philippines has grand ambitions of positioning itself as hub for LNG investments in the Asian region. But realistically, what the country can just afford as initial investment foray would be installation of floating storage regasification unit (FSRU); while the onshore terminals are being pushed to later timeframes – and this is a far cry from what Asian peers have already been accomplishing in the LNG investment domain.
Lista noted that through this cooperation, the American company “can help us bridge the gaps in the value chain for a robust LNG industry.”
Edens, who is co-owner of NBA basketball team Milwaukee Bucks, in turn stated that the MOU “will enable cleaner, more affordable and more reliable energy for the people of the Philippines.”