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MIIS, Smart host first ever Youth Innovation Challenge

The Youth Innovation Challenge (YIC) 2019 is set to bring together public and private students both local and international to formulate innovative solutions to real-world challenges.

Spearheaded by the Multiple Intelligence International School (MIIS), and in partnership with Smart Communications, US-ASEAN Business Council, and GoNegosyo, the event will take place at the Philippine International Convention Center (PICC), Pasay City, Metro Manila.

At YIC 2019, young innovators will be tackling problems spanning the eight intelligences under the MI Framework popularized by Harvard psychologist Howard Gardner. The morning session will be a plenary session with resource speakers from different industries in the Philippines, including Angkas’ Angeline Tham, Cubo’s Earl Patrick Forlales, and Kalibrr’s Paul Rivera.

In the afternoon, the delegates will be divided into the eight intelligences. Each of these will be introduced by notable resource speakers, including Grab Philippines’ Brian Cu, Habi Education Lab, Vaquform’s John Tan, and UP Bikeshare’s Miguel Laperal.

The program will be capped off by the awarding of the MI Awards, a national search for individuals and organizations who have used their “SMARTS” to make a difference. The Awards have been given since 2005; past awardees have been President Corazon Aquino, Cecillo Pedro, Ogie Alcasid, and Speaker Sonny Belmonte.

Business Expectations Survey (Q3 2019)

FILIPINOS turned bullish for July-September after 12 months of pessimism, marking the best result in seven quarters, while companies’ confidence eased from the preceding three months, according to the central bank’s latest consumer and business expectation surveys released on Thursday. Read the full story.

Business Expectations Survey

Filipinos turn bullish, firms less optimistic

FILIPINOS turned bullish for July-September after 12 months of pessimism, marking the best result in seven quarters, while companies’ confidence eased from the preceding three months, according to the central bank’s latest consumer and business expectation surveys released on Thursday.

The third-quarter Consumer Expectations Survey showed the overall confidence index (CI) at 4.6% in the current quarter, capping four straight quarters of pessimism and marking the best result since the 9.5% recorded in 2017’s last three months.

The “next quarter” CI came in at 15.8%, the best reading in seven quarters or since the 17.5% recorded in 2017’s last three months.

Consumers’ third-quarter CI for the “next 12 months” was the best so far this year at 29.8%, though it was lower than the year-ago 13%.

On the other hand, the third-quarter Business Expectations Survey put the overall CI at 37.3% for the current quarter, lower than the second quarter’s 40.5% though still better than the year-ago 30.1%.

The “next quarter” expectation level was at 56.1%, better than the second quarter’s 47.6% and the year-ago 42.6% and the best reading in three years or since the 56.8% recorded in 2016’s third quarter.

The Bangko Sentral ng Pilipinas (BSP) explained in the separate reports that a positive overall index means that optimists among respondents outnumbered pessimists.

The latest consumer survey was conducted among 5,488 households nationwide last July 1-13, while the business survey was conducted on July 10-September 10 among 1,487 firms surveyed nationwide from the combined list of the Securities and Exchange Commission’s Top 7,000 Corporations in 2010 and BusinessWorld’s 2017 Top 1,000 Corporations in the Philippines.

CONSUMER SPENDING TO PICK UP
The overall consumer CI is computed as the average of three indices, namely: perception on general economic condition of the country, family financial condition and family income.

The BSP attributed consumers’ overall optimism this quarter to improved law and order, availability of more jobs, good governance, as well as additional and higher income.

For the next quarter and the year ahead, consumer confidence improved on the back of availability of more jobs, additional and high income, good governance and stable prices of goods.

The report also noted that consumer confidence in Metro Manila was at a record-high 13.2%, while the reading in areas outside the National Capital Region (NCR) turned positive at 3.2% after four straight quarters of negative readings and was the best result in seven quarters or since the 9.9% recorded in 2017’s final three months.

Households’ spending outlook for the next quarter improved to 36.2% from 32.7% in the previous survey, suggesting “that more respondents continue to expect higher spending on basic goods and services compared to those who said otherwise” and “that growth in consumer spending may increase in the next three months.”

The percentage of households that considered this quarter as a good time to buy big-ticket items steadied at 28.9% from 29.6% in the second quarter, and was “broadly steady for purchase of motor vehicles, more favorable for consumer durables, but less upbeat for real properties.”

BUSINESS CITES SEASONAL SLUMP
Businessmen asked in the latest survey turned less optimistic, citing seasonal factors like a slack in demand and business slowdown amid the rains, smaller sales due to a decline in orders, lack of supply of raw materials, stiffer competition and perceived unfavorable effects of various policies like the liberalization of rice importation and ban on provincial buses along EDSA, the central bank reported.

Business outlook improved for the quarter ahead, however, due to expected better consumer demand during the harvest and the approaching Christmas holiday, increases in orders and projects, more favorable macroeconomic conditions like slower inflation, lower interest rates and a stable foreign exchange rate, business expansion and bigger state spending especially on infrastructure.

The BSP noted that respondents’ outlook steadied in Metro Manila at 40.4% from 40.6% in the second quarter, but was “less optimistic” at 31.9% from 40.3% in areas outside the NCR.

Employment outlook for the succeeding quarter remained positive though lower at 19.6% in the latest survey compared to 26% in the preceding survey and 26.3% a year ago, suggesting “that more firms will continue to hire new employees, although the number that said so are lower compared to the Q2 2019 survey result.”

Moreover, the reading on expansion plans was lower at 30.4% from 33.5% in the second quarter and 36.1% a year ago.

Business Expectations Survey

Q3 GDP growth likely faster than first half — Pernia

OVERALL economic growth this quarter will likely clock in faster than last semester when numbers are reported on Nov. 7, Socioeconomic Planner Ernesto M. Pernia told reporters on Thursday.

“I think we’ll have a higher performance… higher than the second quarter… higher than in the first semester,” Mr. Pernia said when asked on his initial assessment on third-quarter growth on the sidelines of a public policy conference.

Gross domestic product (GDP) growth crawled by 5.6% and by 5.5% in the first and second quarters, respectively, taking last semester’s average pace to 5.5% against an already reduced official 6-7% target for the entire 2019.

Mr. Pernia had said it would take a second semester growth of 6.4% to enable the economy to hit the lower end of that target range.

On Thursday, he was less clear if the third-quarter pace would approach or beat the year-ago 6.02%. Asked if he thought six percent was doable, he replied: “I would think so,” citing “the usual drivers” — in reference to household spending, which though easing lately still contributes about 70% to GDP, and bigger government expenditures as state offices rush to catch up with delayed spending plans.

Both the government and private sector economists blamed the growth slowdown last semester on late enactment of the national budget for this year and the 45-day ban on public works ahead of the May 13 elections that left new projects unfunded for much of the first semester.

President Rodrigo R. Duterte on April 15 finally signed the 2019 national budget into law, but vetoed about P95.3 billion in funds he said were not in sync with priorities of his administration, slashing this year’s spending program to P3.662 trillion.

The government spent P1.93 trillion in the seven months to July, still 0.11% less the year-ago P1.932 trillion, while spending on infrastructure and other capital outlays were still down 11.6% year-on-year at P386.6 billion, still far from the government’s P1 trillion full-year program, according to latest data released by the Department of Budget and Management (DBM).

The DBM also reported earlier this week that utilization rate of national government Notice of Cash Allocation (NCA) — authority given by the department to disburse funds to cover state offices’ operations, projects and programs — improved to 92% in the eight months to August, corresponding to P1.802 trillion worth of NCAs out of the P1.961 trillion in NCAs issued for that period, from 86% a year ago. — Beatrice M. Laforga

‘Hot money’ reverses to net outflow in August

MORE FOREIGN FUNDS left the country in August as investors abroad lost appetite for risky emerging market assets due to increased worries about the global economy and the Philippines disappointing economic performance last semester, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.

August saw foreign portfolio investments — also known as “hot money” due to the ease by which these funds enter and leave the economy — posting a $391.74-million net outflow that reversed from net inflows of $225.85 million a year ago and $15.02 million in July.

Gross outflows in August hit $1.605 billion, higher than the $895.31 million figure recorded in the same million last year, though smaller than the $1.666 billion that left the country in July.

This offset the $1.214 billion that came in last month, which is an improvement from the $1.121 billion that foreigners invested in August 2018, but smaller than the $1.680 billion recorded in July.

BSP attributed hot money’s net outflow in August to “ongoing trade tensions between the US and China, the devaluation of the Chinese yuan, the inversion of the US Treasury bond yield curve [signalling a potential recession ahead], heightened protests in Hong Kong and the lower [four-year-low 5.5%] gross domestic product outturn for the second quarter of 2019” that led to a first-half expansion of the same pace and compared to the government’s 6-7% target for the entire year.

Analysts also blamed the net outflow on the escalating US-China trade war and the “ghost month” observed across East Asian markets.

“The August net outflows of foreign portfolio investments transactions is largely due to a confluence of local and external events contributing to a lot of uncertainties in markets and the general economy,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail when sought for comment.

“The biggest contributor so far is the protracted trade war between the PRC [People’s Republic of China] and the US. Any news about progress and/or regression of trade agreement and resolution prospects moves and impacts market sentiments and perception.”

For Michael L. Ricafort, chief economist at the Rizal Commercial Banking Corp., “other external factors include the ghost month in East Asian markets and the vacation season in the US/Northern hemisphere that resulted in lower volumes and greater volatility in the financial markets.” — Luz Wendy T. Noble

Trump is biggest risk to world economy, says central bank governor

SINGAPORE/MANILA — What’s the biggest risk to the world economy today?

It’s the US president, Philippine central bank Governor Benjamin Diokno told a panel discussion in Singapore, with the audience bursting into laughter at his candid answer.

A former economics professor who took the helm of the central bank in March, Mr. Diokno said the US economy is growing due to the tax cut enacted under President Donald Trump, but the policy will exacerbate debt in the long run.

WHEN THE US SNEEZES…
The Filipino central banker may have a reason for his quip: When the US sneezes, the rest of the world catches a cold, as the saying goes.

The US-China trade war — with Mr. Trump objecting to many of the policies that have driven China’s rapid rise to become the world’s second-largest economy — has rippled through emerging Asia and threatens to start a global recession.

“Whatever Trump does is really driving the markets. It affects everyone else,” said Michael L. Ricafort, an economist at Rizal Commercial Banking Corp. in Manila.

TRUMPIAN TWEET
Mr. Trump, who wants to see stronger US economic growth ahead of his re-election bid next year, has been outspoken in favoring more aggressive monetary-policy easing.

Last week he tweeted that the US Federal Reserve should cut rates to zero or less.

On Wednesday, after the Fed lowered its benchmark interest rate for a second meeting in a row, cutting by a quarter-point to 1.75-2%, Mr. Trump was unimpressed. “No ‘guts,’ no sense, no vision!” he tweeted.

Fed chief Jerome Powell has stressed the need for the US central bank to remain independent from government pressure. Analysts have described Wednesday’s move as a “hawkish cut,” emphasizing that the Fed essentially sees these moves as insurance for an economy that remains basically healthy. Three Fed members dissented from the decision to cut, suggesting an unusual amount of discord on the policy board.

Speaking on a panel at the Milken Institute Asia Summit in Singapore, Mr. Diokno said Mr. Trump’s pressure on Mr. Powell is “unfair” and that governments should respect central bank independence. — Bloomberg

Lola Igna bags top PPP prize

A FILM about a cranky old woman who wants to die but whose neighbors wouldn’t let her won the top prize at the Pista ng Pelikulang Pilipino awards night on Sept. 15 at One Esplanade in Pasay City.

Aside from winning Best Picture, Eduardo Roy, Jr.’s Lola Igna also took home the trophies for Best Actress for 70-year-old character actress Angelica “Angie” Ferro, Best Screenplay, and Best Musical Score.

Another of the night’s big winners was Tyrone Acierto’s thriller Watch Me Kill which won Best Director, Best Editing, and Best Cinematography.

Jun Lana’s The Panti Sisters took home the Best Actor trophy for Martin del Rosario along with the Audience Choice Award. The film was also the festival’s biggest earner as it took in P36 million in its first two days.

The third Pista ng Pelikulang Pilipino ran until Sept. 19 in select cinemas nationwide.

Below is the full list of winners:

• Best Picture: Lola Igna

• Jury Prize: Last Song Syndrome (LSS)

• Best Director: Tyrone Acierto, Watch Me Kill

• Best Actress: Angelica “Angie” Ferro, Lola Igna

• Best Actor: Martin del Rosario, The Panti Sisters

• Best Supporting Actress: Tuesday Vargas, The Panti Sisters

• Best Supporting Actor: Gio Alvarez, I’m Ellenya L

• Best Editing: Watch Me Kill

• Best Screenplay: Lola Igna

• Best Cinematography: Watch Me Kill

• Best Production Design: The Panti Sisters

• Best Musical Score: Lola Igna

• Best Theme Song: “Araw-araw” by Ben&Ben for Last Song Syndrome (LSS)

• Audience Choice Award: The Panti SistersZBC

Gently go into that good night

By Carmen Aquino Sarmiento

Movie Review
Lola Igna
Directed by Eduardo Roy, Jr.

LOLA IGNA by the acclaimed filmmaker Eduardo Roy, Jr. got the Best Picture and Best Screenplay (with Margarette Labrador as co-writer) awards for this year’s Pista ng Pelikulang Pilipino. Its lead, the theater stalwart Angie Ferro, as the eponymous Lola Igna, won for Best Actress. Ms. Ferro, age 82, plays a 118-year-old woman who lives alone in a bamboo hovel without any indoor plumbing, amidst the rice fields of a fictitious rural barrio. Despite its deceptively bucolic setting, the film deals with such sobering topics as aging alone (because you have outlived most of your loved ones and friends), death, abandonment, and the narcissism of today’s youth.

There is a good naturedly fantastical air to the whole enterprise. Lola Igna’s granddaughter Nida (Maribel Lopez — herself in her 60s) pushes her grandmother to try for the title of the World’s Oldest Living Grandmother, which is part of a Guinesss Book of Records type competition called Amazing People. The title comes with a cash prize of $50,000 for every year of the record-holder’s life. In Lola Igna’s case, that would come to $5.9 million or around P310 million — not too shabby, and enough incentive for her relatives to keep her alive and well. Lola Igna continues to indulge in a glass of tuba (coconut wine), one of the factors to which she attributes her extraordinary longevity. Nida begins bringing her grandmother dinner, although providing her with proper sanitation appears not to be a consideration. The hovel is within range of a cellular tower and Wi-Fi though.

Easy laughs are milked from several scenes of Lola Igna sitting on her chipped and filth-encrusted orinola (chamber pot). An especially memorable one has her impishly dumping its contents upon the handful of tourists who disturb her peace. Another unfortunate scene has Lola Igna having an “accident” during a press conference, because pushy, over-eager Nida refuses to heed the old lady’s plea to let her use the bathroom before having to take the media folks’ questions. Other interview scenes recall the mockumentaries of Christopher Guest.

Nida quickly parlays her grandmother’s proverbial 15 minutes of fame into merchandise for the tourists who trickle in. Lola Igna’s smiling face is emblazoned on T-shirts, mugs, fans. It’s a sly dig at the cult of celebrityhood. Nida’s son Bok (Royce Cabrera) takes the tourists trekking through the rice fields to view his great-grandmother in the wrinkled flesh, much like a carnival sideshow curiosity. Selfies cost extra. Lola Igna initially resists these intrusions, but the arrival of Tim (Yves Flores), a long-lost great-great grandson, who intends to vlog about her, softens her. Soon she’s playing along like a pro. Few elderly persons continue to have financial utility. If she’s going to be taken advantage of, it might as well be by her family.

Lola Igna pines for those who have gone ahead, particularly for her husband Carias (Rener Concepcion). She keeps a shrine in their memory. However, when these dear departed appear to her in an ominously dark rice field in the dead of night, they look downright menacing, more like the walking dead rather than ascended souls illuminating one’s passing on. Unperturbed, she takes this grim encounter as a sign for her to get ready, and borrows carpentry tools from her neighbor Gusting (Armand Reyes). He confides how he worries that as a gay old bachelor, no one will be waiting for him (walang taga-sundo) on the other side. This is one of the film’s most poignant and genuinely touching moments. It is so Filipino, after all, to always want to have company whether at mealtimes or while sleeping. The rest of the ensemble such as Senyang the perky storekeeper, play the benign regular folk one hopes to find in a small Filipino town. Thus, the creepy, pod-people quality of the taga-sundo makes one wonder why death seems to have transformed these good citizens, and not for the better. It may reflect the director’s ambivalence and doubt about death and the afterlife.

The director was said to have been inspired by the 102-year old Kalinga tattoo artist Apo Whang-od Oggay. Roy’s maternal grandparents were also from the Mountain Province but he never knew them. Lola Igna is his whimsical, occasionally fleetingly dark, take on how it might have been if his grandmother had lived long enough for them to meet. Its tone is much lighter than his more recent work — Quick change (2013); Pamilya Ordinario (2016); and F#*@BOIS (2019). The title character might also recall the harmonica-playing Francisca Susano who claimed to have been born on Sept. 11, 1897 (20 years before Ferdinand E. Marcos), in Barangay Oringao, Kabankalan City, Negros Occidental. When she was in the news in 2016, Susano’s eldest daughter Magdalena Ortega, supposedly born in 1914, was already 102 years old. However, neither the Gerontology Research Group nor the Guinness World Records, verified her claims. The last news about Susano was of her turning 119 in 2017, then nothing further appears about her. She’s probably dead by now.

Phinma to invest $50 million into unit of Vietnamese cement firm

By Arra B. Francia, Senior Reporter

PHINMA CORP. is investing $50 million into a unit of Vietnamese cement manufacturer Vissai to finance the expansion of its cement plant.

In a disclosure to the stock exchange Thursday, Phinma said it signed a term sheet with Vissai’s subsidiary Song Lam Cement Joint Stock Company and Vissai Chairman Hoang Minh Truong for the investment via preferred shares.

The number of shares, as well as the percentage stake Phinma will have in Song Lam following the investment, is yet to be determined.

The investment entitles Phinma to nominate one member to Song Lam’s board of directors, as well as the chief financial officer of the company.

Under the deal, Phinma will get annual and fixed cumulative dividends of 7.5% from the preferred shares, which can then be converted to common shares.

The listed firm described Vissai as the largest privately owned cement manufacturer in Vietnam which exports to 37 countries, including the Philippines. Its unit Song Lam owns the largest cement plant in Vietnam. It is seen to be a major supplier for Phinma’s 60%-owned unit, Philcement Corp.

Vissai also owns a 30% stake in Philcement.

“The investment proceeds will be used to construct Phase 2 of the Song Lam Cement Plant which will expand manufacturing capacity to 24,000 tons of clinker per day,” Phinma said.

This expansion will double Song Lam’s production capacity, which is mainly focused on exports.

Phinma expects the deal to close within the year following the execution of share subscription agreement and shareholders’ agreement. This is in addition to additional regulatory, government, or corporate approvals.

The company will pay 10% of the investment in advance, while the remaining 90% will be paid upon closing.

The Philippine Stock Exchange, Inc. suspended trading of Phinma shares on Thursday after ruling that the transaction is covered by the Disclosure for Substantial Acquisitions and Reverse Takeovers of the Disclosure Rules. The trading suspension will be lifted on Sept. 20 at 10 a.m.

Shares in Phinma closed at P9.18 each on Wednesday.

Phinma’s net income attributable to the parent dropped 35% to P27.84 million in the first half of 2019, even as gross revenues jumped 26% to P5.64 billion.

Film industry celebrates 100 years of PHL Cinema

By Susan Claire Agbayani

PHILIPPINE CINEMA is 100 years old and despite challenges in the industry, it is time to celebrate.

“We are entering a very, very global market and it’s inevitable that a lot of these foreign films are going to enter the country, and they will continuously dominate,” said Mary Liza Dino-Seguerra, Chair of the Film Development Council of the Philippines (FDCP), in her opening remarks at Sine Sandaan: Celebrating the Luminaries of Philippine Cinema’s 100 Years, held late last week at the New Frontier Theater in Araneta Center, Cubao, Quezon City.

“Let us unite for this industry (that) we love, because the next 100 years of Philippine Cinema is going to be about unity, understanding, what we need to do together as an industry to further elevate our craft. We just have to understand how we can champion and empower the rest of the sectors in the industry who need support. It’s a call of action for all of us to be more giving, to collaborate, to respect each other’s spaces, find commonalities, so we can all work better together. I can see a brighter future for the next 100 years of Philippine cinema,” Ms. Dino-Seguerra said.

Almost 400 luminaries and icons of Philippine Cinema — as well as ambassadors and representatives of government agencies — walked the red carpet, and were honored during the program — which ran over four hours — to mark the industry’s centennial year.

Honored at the rites were “luminaries” such as directors, independent and regional filmmakers, leading ladies/men, action stars, bold stars, producers, film studios, film-related organizations, movie fans, even the movie press. It is noteworthy that not just screenwriters or music scorers were recognized; even those who are almost never mentioned except in closing film credits were honored that night.

The most prominent of the luminaries were billed as “icons,” the likes of screenwriter Ricky Lee, actresses Lorli Villanueva, Boots Anson Roa, Angie Ferro, Divina Valencia, Jaclyn Jose, and Fides Cuyugan-Asensio; composer (and National Artist for Music) Ryan Cayabyab; indie filmmaker Raymond Red, and filmmaker and UP professor Dr. Nick Deocampo.

For a complete list of luminaries and icons honored by FDCP, check out its Facebook page: https://www.facebook.com/FDCP.ph/

A tribute was also given to Jose Nepomuceno, the father of Philippine Cinema.

The theater was transformed into an Art Deco Cinema “as an homage to standalone theaters during the Golden Age of Philippine Cinema.” An FDCP press release said, “Remembered for its intricate structure and viewed as a symbol of the first rise of film as a staple of Filipino culture, Art Deco cinemas in the Philippines were prolific in the 1930s and 1950s and (is) an apt visual theme in the celebration of the 100 years of Philippine Cinema.”

“The dream was to give back, to give the best we can offer to serve this industry. We wanted to bring back the glitz, the glamour, because we all deserve it,” Ms. Dino-Seguerra said.

“The past 100 years of Philippine Cinema has brought us a lot of successes and failures. You deserve nothing less but the best. Our cinema is so diverse, and it’s composed of so many people, and it’s not just icons, living legends, artists, directors who are part of this. There’s no big or small (player) in the industry. We’re all on equal footing,” she said in Filipino, which was met with hearty applause. “You are all luminaries of Philippine cinema,” she said.

Sine Sandaan was followed by Pista ng Pelikulang Pilipino (PPP) 2019, a week-long exclusive screening of Filipino genre films.

Interestingly, it may be that the actual 100th year of Philippine Cinema was in 2017.

In a Facebook comment to a post made by Mr. Red, Dr. Deocampo remarked, “My research shows that Jose Nepomuceno made a short film, a newsreel, first in 1918 before making his first full-length film, Dalagang Bukid… one year after he set up his Malayan Movies studio in 1917. And the newsreel he first made was shot in Cebu, not in Manila. So the first locally shot film by a native was shot in Cebu, after all! I have several documents — all primary documents — to prove this claim: publications that were contemporaneous to the release of both films (one in 1918, the other 1919); publications showing that the ‘golden age’ (50 years) of PH cinema was in 1967 as celebrated by [then city of Manila] Mayor Antonio Villegas when he announced the holding of the Manila Film Festival to celebrate the ‘golden anniversary’ of Tagalog movies. This effectively made 1917 as the year of its birth. In addition, I have a video interview of Luis Nepomuceno, Jose’s only living son (aged 94 at the time of the interview), who claimed that his father marked 1917 as the year when he established the local cinema after setting up his Malayan Movies studio and the first film he did was a short film shot in 1918!”

Whether 2017 or 2019, we have cause to celebrate, indeed.

LOTR series in NZ

WELLINGTON/SAN FRANCISCO — New Zealand will be home again to hairy feet and pointed-ear Hobbits after Amazon Studios confirmed the Pacific country will be the location for its new The Lord of the Rings series, a TV show widely tipped to be the most expensive ever made. The Amazon.com Inc. unit said the multi-series adaptation will explore new storylines preceding author J.R.R. Tolkien’s The Fellowship of the Ring, the first installment in the famed fantasy trilogy set in the fictional land of “Middle-earth.” Amazon bought the TV rights to Tolkien’s literary classic two years ago when screens were ruled by HBO’s blockbuster fantasy series, Game of Thrones. Unlike HBO and others such as Netflix Inc., a hit for Amazon could not only draw in viewers but also shoppers to its Prime subscription service. Three movies made of The Lord of the Rings trilogy in the early 2000s were filmed in New Zealand by director Peter Jackson. They garnered nearly $3 billion at the box office and 17 Academy Awards. Tolkien’s prequel to The Lord of the Rings, The Hobbit, was also made into a movie trilogy by Jackson in New Zealand. Pre-production for the series has started, and production on the series will begin in Auckland, New Zealand’s biggest city, in the coming months, the statement showed. The new series is likely to boost the economy of the tiny country and create several jobs, having been widely hyped in the media as likely one of the most expensive TV shows of all time. Reuters

LNG demand from smaller markets seen growing

BATON ROUGE, Louisiana — China, India and Europe will remain the main demand growth drivers for liquefied natural gas (LNG) but smaller markets are emerging to receive the new fuel capacity in the US, an integrated global gas business with a new business model predicts.

“There’s a number of new markets that are opening up, facilitated by new technology called floating storage and regasification units or FSRUs,” said Renee Pirrong, research and analysis manager of Tellurian, Inc.

Based in Houston, Texas, the company she represents has presented a new business model that departs from the traditional set up for gas businesses in the US.

“Traditionally, you’d have to build a rather large land-based import facility, but now we’ve actually started converting LNG carriers into regasification facilities, which makes it a lot faster to build infrastructure. All you really have to do is build a port and hook up an FSRU to that port,” Ms. Pirrong told reporters from Asia and Europe, or regions where the company expects LNG demand to come from.

Tellurian’s business model promises natural gas prices at the lift cost, or the price it takes to extract the fuel from the ground. But to be able to do that, the customer is required to be an equity investor.

“Essentially you’d purchase 1 million tons of LNG for an upfront cost of $500 million. So an equity cost of $500 per ton, and for that cost you are entitled to lift LNG at the facility at cost, so you’re not paying a premium every month for your long-term contract,” Ms. Pirrong said.

Tellurian subsidiary Driftwood LNG LLC is developing the production and export terminal in Louisiana. Once completed, the facility will be able to export up to 27.6 million tons of LNG a year to customers anywhere in the world.

Joi Lecznar, Tellurian senior vice-president-public affairs and communication, said Driftwood has secured all the required permits from the US government.

“We have secured one partner so far — Total. They have invested enough,” she said.

Of Driftwood’s capacity, she said Tellurian would be retaining 14 million tons for its own trading portfolio. The group plans to trade in London apart from its existing trading activities in Singapore.

Ms. Pirrong said at least 100 million tons and potentially up to 250 million tons of capacity is required to satisfy demand growth on a global basis.

That demand makes the US well-positioned to export its LNG. The country has emerged as the largest producer of oil and gas in the world largely because of the shale revolution, which started before around 2010 as private exploration and production companies started experimenting with ways to extract resources from shale.

Ms. Pirrong said the US in 2018 had the largest year-on-year growth of oil production in the world. The dramatic growth in natural gas and oil production in the country has had an impact on the prices of the commodities.

“It was the largest not only in the United States but on a global basis. And that was entirely driven from the shale revolution,” she added. “What that has done, it has a corresponding downward impact on global oil prices.”

Ms. Pirrong pointed to a “synergistic relationship” where the US needs global markets as an outlet for its excess production, and global markets need the US for gas supply. Asia, for instance, needs gas for power generation.

“We’re seeing a lot of emerging markets such as Bangladesh, Pakistan, Lithuania using FSRUs as a way to provide greater optionality for fuel imports, and as a low-cost way and a fast way to do so,” she said.

With the assets Tellurian is developing — from production, developing pipelines and the plant itself, it anticipates to build energy infrastructure worth about $30 billion from the Driftwood project alone.

“We believe that we can produce LNG at $3 per mmBtu (million British thermal unit),” Ms. Pirrong said, adding even assuming a shipping cost of about $1.50 a destination in Asia could mean a total cost of $4.50 per mmBtu, the benchmark in pricing the fuel. — Victor V. Saulon

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