Meralco renews interest in gas sector

Manila Electric Co. (Meralco) the power distributor, is reviving its interest in participating in the development of the country’s gas sector after plans to pursue it have previously taken a seat back due to pricing and lack of clear energy mix policy.

The company is willing and ready to be part of the government’s plan to develop the gas sector, whether through piped gas or liquefied natural gas (LNG), Meralco president Oscar Reyes said.

“We indicated with PNOC (Philippine National Oil Co.) our interest in any of their development,” he said.

PNOC was tasked by Energy Secretary Alfonso Cusi 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 megawatts (MW).

During the 35th ASEAN Ministers on Energy Meeting (AMEM35) last week, Cusi said the LNG project is expected to commence groundbreaking in 2018 and is targeted to be online “by 2020 to safeguard against the anticipated depletion of the Malampaya gas facility in 2024.”

Putting up a gas-powered facility has always been an option for the company as long as it delivers reliable, long-term, competitive and affordable price to consumers.

“We’ve always looked at [gas], it was never shelved. We always looked at it and we continue to look at it based on prevailing competitiveness in the whole energy mix. If the future is one of competitive gas prices, then it’s back in the agenda,” Reyes said.

Meralco is also open to partnering with any party who can add value in the development of the gas sector, the company official said.

“Our approach has been largely to partner with established, credible partners. That has been our approach to generation, rather than do it solely. We would rather partner with a strategic, credible partner with a good track record, because then that validates your decision,” he said.

In 2015, Meralco said it was in talks with Osaka Gas Co. Ltd., Japan’s second largest natural gas supplier, for a possible development of an LNG facility.

At that time, Osaka Gas was doing a feasibility study on a planned $2-billion, 1,500 megawatt (MW) gas-fired power plant project with Meralco.

However, Meralco said it is open to new partnerships to pursue the construction of an LNG facility amid the projected increase in capacity of gas-fired power plants in the country.

But in 2016, Meralco said the lack of a firm energy mix policy, demand and favorable pricing levels have stalled plans to enter the LNG space.

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

Reyes earlier said LNG remains one of the power investment thrusts of Meralco but timing would be critical in the realization of the project, which should be ahead of the Malampaya gas field depletion by 2024. Currently, around 3,200 MW of power plant capacity is dependent on the country’s sole natural gas source.