By Victor V. Saulon, Sub-Editor
STATE-LED Philippine National Oil Co. (PNOC) is back to crunching numbers as it reviews the value of its assets and how these will translate into its equity in the liquefied natural gas (LNG) hub being led by Davao City businessman Dennis A. Uy.
“Talks are ongoing. May mga points lang kami na pinaguusapan (There are points that we are discussing) because they offered a seat in the board,” Reuben S. Lista, PNOC president and chief executive officer, said in a phone interview last week.
Phoenix Petroleum Philippines, Inc., in which Mr. Uy is president and chief executive officer, has the Energy department’s approval to start building the LNG hub in partnership with China’s CNOOC Gas and Power Group Co. Ltd.
PNOC and Phoenix Petroleum had held initial talks earlier this month to include the Department of Energy’s commercial arm into the project under Tanglawan Philippine LNG Inc., the entity formed by Mr. Uy’s group and CNOOC.
“Almost napagusapan lahat [ng] refinements (We have discussed almost all the refinements,” Mr. Lista said, enumerating these to include PNOC’s equity in Tanglawan.
“Siyempre (Of course), we have to appraise the value of what we have and [the] option to invest after some time — kung ilang percentage ang kukunin namin (how much percentage are we going to get),” he said.
Phoenix Petroleum earlier said having PNOC on board means the government corporation’s involvement in “pipeline infrastructure and franchise, banked gas, equity, and other marketing opportunities.”
“Their cheapest source of gas is our banked gas,” Mr. Lista said.
In the past, PNOC, under Mr. Lista, held talks with owners of power generation companies that run on natural gas. None of the talks resulted in the sale of the banked gas.
In September last year, Mr. Lista said he would be negotiating the sale of the gas amounting to 97.67 petajoules at a price lower than what it was willing to sell before. This was after PNOC twice invited buyers in 2018 but none came forward with an offer.
He had sought authorization from the PNOC board to negotiate at a price lower than the $6.616 per gigajoules under the Ilijan gas-fired power plant’s gas sale and purchase agreement.
Under a negotiated deal, the Ilijan price will become PNOC’s price ceiling, he had said, but declining to give a floor price. It was the minimum price the company was willing to sell before.
First Gen Corp. at that time offered $4.50 per gigajoules during a verbal discussion, Mr. Lista said. But when PNOC made a formal invitation, the Lopez-led group offered $3.48 per gigajoules. A petajoule is equal to a million gigajoules.
PNOC previously valued the banked gas at P11.9 billion. The gas, which was paid by the government for its future use, is banked in the reservoir of the Malampaya deepwater gas-to-power project offshore Palawan. A PNOC unit is part of the consortium that developed and operates the project.
Mr. Lista declined to give details about how its pipeline infrastructure and franchise and how these would translate into PNOC’s share in the LNG hub project.
Phoenix Petroleum said the Tanglawan project is expected to break ground this year on its regasification and receiving terminal with a capacity of 2.2 metric tons per annum (mtpa). The facility will be built in Batangas province, it said.
The project was initiated in anticipation of the depletion of the Malampaya gas discovery off Palawan’s shores. It is the country’s only source of natural gas and currently powers five gas-fired plants in Batangas.
“The facility will help support the demand for a clean, competitive, and environment-friendly energy source in Luzon. The LNG hub project aims to provide energy security for the country,” it said.
It placed the commercial operation of the facility by 2023, while also aiming to develop a gas-fired power generation facility with an installed capacity of up to 2,000 MW.
By Victor V. Saulon, Sub-Editor