Phinma eyes LNG facility in Cebu
By Victor V. Saulon, Sub-Editor
PHINMA Petroleum and Geothermal, Inc. (PPG) is developing a liquefied natural gas (LNG) facility with a 120-megawatt (MW) power plant in Cebu, which company officials expect to be completed by 2022 to 2023.
“We are developing an LNG-to-power project in Argao, Cebu,” Raymundo A. Reyes, Jr., PPG executive vice-president and chief operating officer, told stockholders during the company’s annual meeting on Thursday. Argao is about 70 kilometers southwest of Cebu City.
“There is a low level of activity in the upstream [sector]. Your company decided to expand to the midstream sector of the business,” he added.
Mr. Reyes said in November 2017, the company signed a joint development agreement with three companies, which will cover the deployment of the floating storage and regasification unit as well as the 120-MW power plant and associated facilities.
“To date, high-level engineering design and solutions have already been completed for the jetty, the floating power plant, and the floating LNG storage and regas unit,” he said. “And we expect by the middle of this year, we would have the feasibility level cost available to us.”
He said LNG supply and shipping solutions have already been identified and selected, and an LNG market forecast has also been completed. The company is in discussion for an agreement on LNG supply and delivery, he added.
Mr. Reyes told reporters that the feasibility study, once completed, would determine the economic viability of the project, and whether it is a “go or no-go.”
“This will be a 20 to 25-year project so we have to be conscious of the behavior of LNG price in the market,” he said.
Francisco L. Viray, PPG president and chief executive officer, said the capacity of the power plant was determined based on the region’s demand.
“It’s the size that can be absorbed in Visayas. No more than 10% kasi dapat ang size mo sa grid. Visayas is about 2,000 MW, so no more than 200 MW,” he said, adding that the size is expandable because the facility is modular.
“And of course it is contingent on a power supply agreement (PSA). Hindi naman matutuloy ’yon kung walang PSA. That’s very critical,” the official added.
Mr. Viray said the capacity of the storage facility would be determined after the outcome of the feasibility study.
“The study here will tell us whether gas will be competitive under a technology-neutral energy mix, or not. Once it is competitive, I think it will be competitive in other sites, so it’s just a matter of timing later on,” he said.
The company had earlier dropped plans to build the facility in Sual, Pangasinan because of the excess capacity in the Luzon grid, Mr. Viray said.
“I don’t think we need that capacity [in Luzon] before 2025. So we shifted it dito sa Visayas,” he said.
Mr. Viray declined to disclose the expected cost of the project, saying figures at this time were still “very rough” estimates. He also did not name the development partners because of a non-disclosure agreement.
Mr. Reyes said the biggest cost of component of the project would be the combined cycle gas turbine for the power plant.
PPG parent Phinma Energy Corp. is among the local companies that have undertaken initial plans to develop an LNG facility. The venture is in part prompted by the expected depletion of the country’s lone source of domestic natural gas, the Malampaya offshore field west of Palawan, which is expected to run out starting in 2024.
Natural gas, said to be the cleanest fossil fuel, is usually transported through a pipeline, but if the deposit is large and the market is overseas, the gas may be liquefied into LNG and moved via specialized tankers.
The other day, Phinma Energy said it is entering the downstream oil sector, initially catering to the fuel requirement of its own diesel plants, through subsidiary One Subic Oil Distribution Corp.