LIQUIFIED NATURAL GAS (LNG) imports remain the best way to address the Philippines’ power needs in the next few years, the Secretary of Energy said.
“While the LNG industry is still in its infancy stage, imports of LNG remains the best option for the Philippines at the moment to assure the country’s future energy requirements will be sufficiently met,” Energy Secretary Alfonso G. Cusi said in a message to the LNG Producer-Consumer Conference 2020.
The Malampaya field off northern Palawan is the country’s only source of natural gas and is expected to be completely depleted by 2027.
“They say that the Malampaya supply can go as far as 2027 but it does not have enough gas for the further expansion needed to provide future natural gas requirements particularly with the plan to expand application of LNG in the industrial, commercial, residential, and transport sectors,” Mr. Cusi said.
The Malampaya gas-to-power project under Service Contract 38 accounts for 3,200 megawatts of electricity, or 21.1% of gross power generation in 2019. The field is operated by Shell Philippines Exploration B.V., along with its partners, Udenna Group’s UC Malampaya LLC and Philippine National Oil Co.-Exploration Corp.
The government is evaluating various LNG terminal proposals to hold the expected imports that will replace Malampaya’s output.
So far, it signed off on LNG terminal projects put forward by the Lucio Tan Group with Blackstone Group’s affiliate Gen X Energy, First Gen Corp. with Tokyo Gas Co. Ltd., US-based Excelerate Energy, and Energy World Gas Operations Philippines, Inc.
Among the four proposals, the Lopez group’s First Gen is poised to deliver imported natural gas as early as 2022 with the construction of its interim gas terminal starting in the last quarter of this year. The DoE (Department of Energy) last month gave the company the go signal to begin construction.
The DoE is committed to developing the Philippines as a regional LNG hub. In 2017, it passed the Philippine Downstream Natural Gas Regulation which seeks to develop an LNG market. Recently, it issued an LNG investors’ guide to aid in the government’s efforts to raise natural gas capacity. — Adam J. Ang