Phoenix-CNOOC venture junks LNG terminal project

By Victor V. Saulon, Sub-Editor

PHOENIX Petroleum Philippines, Inc. and CNOOC Gas and Power Group Co., Ltd. have asked the Department of Energy (DoE) to suspend its proposal to build a liquefied natural gas (LNG) import terminal in the country, government officials said on Tuesday.

Energy Secretary Alfonso G. Cusi said the request for suspension was prompted by the deal between Phoenix Petroleum’s parent firm Udenna Corp. to acquire the stake of Chevron Malampaya LLC in the Malampaya gas-to-power project.

“They just wrote us a letter because of the development that they have [with] Udenna getting the Chevron share in Malampaya, they are withdrawing their application for the terminal and they want to reassess and submit a new concept,” he said in a chance interview on Tuesday.

“They are not pursuing it. They want to revisit their LNG terminal program in lieu of the Malampaya development. So I think they are going to tie it together,” Mr. Cusi added.

The requested suspension came after Udenna announced on Nov. 13 that its subsidiary UC Malampaya Philippines Pte. Ltd. had signed a sale and purchase agreement to acquire the 45% stake of Chevron in the deepwater located offshore northwest Palawan.

Udenna said the agreement marks an important milestone in the bilateral discussions between Chevron and Udenna over the past 12 months, and shows their close collaboration in achieving a positive outcome for all parties involved.

Aside from Chevron, the other stakeholders in the Malampaya project under the DoE-awarded Service Contract 38 are Shell Philippines Exploration B.V. (SPEx) with 45%, and state-led Philippine National Oil Co. Exploration Corp. (PNOC EC) with the remaining 10%.

SPEx is the operator of the project, which supplies about a third of the country’s power needs and has contributed over $10 billion in government revenues.

DoE Undersecretary D. Marcos told reporters that the agency is still evaluating whether to grant the request of Phoenix Petroleum, a Davao City-based oil company led by businessman Dennis A. Uy.

Mr. Cusi also gave his position on the unsolicited proposal of PXP Energy Corp. for the “strategic development and utilization” of an integrated gas hub in Malampaya when Service Contract (SC) No. 38 expires in 2024.

The DoE earlier denied the plan, but on Dec. 6, PXP Energy said it had asked the agency to reconsider its decision.

Under its proposal, the company envisions the Malampaya infrastructure and distribution network to support the continued development of the oil discovery’s resources as well as the economic development of Sampaguita field and other nearby projects under SC 72, which is operated by PXP Energy through Forum (GSEC 101) Ltd.

“They cannot take over the Malampaya project because it is not yet expired,” he said. “It’s not yet the time.”

Mr. Cusi said SPEx is asking for an extension of the Malampaya project, which he said his department is evaluating. SPEx previously said that the gas discovery could still further exhausted.

“So we cannot give merit to the application of PXP at this point in time,” he said.