Manila Bulletin

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.”

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