THE Philippine National Oil Co. (PNOC) is now considering bidding out the $2-billion integrated liquefied natural gas (LNG) facility that the state-led company plans to build in Batangas to serve as a hub for trading and transshipping the fossil fuel in the region.

“We are ready for bidding,” Reuben S. Lista, PNOC president and chief executive officer, told reporters in a media gathering at the Department of Energy (DoE) headquarters on Monday.

He made the comment after the unsolicited proposals submitted by foreign entities failed to meet specific requirements, prompting the company to consider bidding out the project with the terms of reference set by the DoE’s commercial arm.

Mr. Lista said the first proposal that was evaluated by the company’s technical working group came from Korea Electric Power Corp. The submission was assessed but returned to the proponent because of unmet requirements, he said.

The technical panel then evaluated the next submission it received coming from Lloyds Energy Group LLC and its partner Itochu Corp., which was also returned.

A proposal from China National Offshore Oil Corp. was also returned because it was directed to the DoE instead of the technical working group, Mr. Lista said.

“Lloyds submitted a new proposal,” Mr. Lista said, adding that the submission would be evaluated first before subsequent proposals.

Still, Mr. Lista said PNOC was making preparations should it decide to bid out the project.

“At least kung saka-sakali ready na kami for bidding (At least we’re ready in case we opt for bidding,” he said. “We will come up with the TOR (terms of reference) already for the bidding.”

Mr. Lista also said that PNOC had received a proposal from the Asian Development Bank (ADB) as a consultant for the project.

“We are not technically qualified even if we have been studying it for one year,” he said.

He said PNOC has yet to decide whether to hire ADB as the two continue to negotiate on the consultancy fee. But he said the cost would be shouldered by the winning proponent.

Mr. Lista said PNOC had advised DoE Secretary Alfonso G. Cusi “on the way forward” for the LNG project because the company had been trying to sell its banked gas, referring to its Malampaya natural gas it owns.

He previously said there is a need to monetize the banked gas to avoid borrowing the funds to be used for its plan to build the LNG hub. He said the National Economic and Development Authority may not approve any move to secure a $2-billion loan, the estimate cost of the hub.

Bidding out the project will need PNOC to put in equity as it wants to keep a stake in the project. It has previously rejected offers to buy the banked gas because the quoted price was lower than the prevailing market price.

“The board will now have the justification to sell at a lower price,” he said.

PNOC, a company created by a presidential decree in 1973, is mandated to provide and maintain an adequate and stable supply of oil. Its amended charter includes energy exploration and development. Operations also cover energy development, including indigenous energy sources such as oil, gas, coal and geothermal.

Building an LNG has become imperative for the government in view of the expected depletion of the production life of the offshore Palawan gas project by around 2022 to 2024. Malampaya delivers up to 20% of the country’s requirements to produce electricity. — Victor V. Saulon