13 firms interested in developing LNG terminal

The Department of Energy (DOE) has received interest from 13 companies—both local and foreign—to develop the country’s liquefied natural gas (LNG) integrated terminal, a ranking government official said.

In a text message, DOE Assistant Secretary Leonido Pulido said the latest companies that submitted letters of interest (LOI) are Atlantic Gulf & Pacific of Manila, JERA Co. Inc., Limay LNG Power Corp., and KEPCO E&C.

These companies add to the existing list of interested proponents to build the LNG terminal that have previously submitted their respective LOIs.

So far, the local companies include Cleanway Energy Dev. Corp., First Gen Corp., Philippine National Oil Co. (PNOC) and Vires Energy Corp.

On the other hand, the foreign firms are China National Offshore Oil Corp., Carmine Energy PTE Ltd., SK E&S Co. Ltd. and Transformation Ltd.

The agency is accepting letters of intent (LOI) from companies interested to build the LNG terminal under the Philippine Downstream Natural Gas Regulation (PDNGR), which details the rules and regulations governing the downstream natural gas industry to develop a market and gain energy security and sustainability.

Currently, the companies are still in the pre-application process or the stage where the interested parties are clarifying the rules and what the requirements are, DOE Undersecretary Felix William Fuentebella said.

He said the companies have also been briefed during a preconference with DOE Undersecretary Donato Marcos about the LNG investment that will allow the country to import LNG ahead of the Malampaya gas project depletion by 2024.

The Malampaya project currently supplies fuel to five natural gas plants with a total installed capacity of 3,211 megawatts (MW), equivalent to 21.33 percent of the installed capacity of the Luzon grid and almost 15 percent of the country’s total installed capacity.

During the pre-conference, Pulido said the interested companies raised concerns over power supply agreements (PSA) of these gas plants, which are set to expire by 2021 and 2022.

“When those PSAs end, there’s a concern on the financing program for the construction of the LNG terminal. The reason why those meetings and conferences are important, is we’re assuring them that that market, the mid-merit market which those plants are serving, will require power generation,” he said.

As the agency clarifies their concerns, Pulido said they expect to start receiving project proposals towards the latter part of the year.

“We’re pretty confident that the discussions they are having right now are nearing maturation. We feel that, based on the reports they’ve given us, we feel that within the third or fourth quarter of this year, we will be receiving the full application of the construction of the integrated facility,” he said.

The DOE is looking to start constructing the country’s LNG hub by mid-2019 to safeguard against the anticipated contract expiration of the Malampaya gas facility.

The facility is also targeted to become an LNG hub for Asia, complementing those in Japan and Singapore.

The agency is also pushing to have a back up provision of letting government construct an integrated facility in the proposed LNG law to support LNG development in the country in the event interested private sector investors will not push through with the project.