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Meralco keen on LNG project
THE Manila Electric Co. (Meralco) has told state-firm Philippine National Oil Co. (PNOC) that it is interested to take part in the country’s first liquefied natural gas (LNG) project.
“We indicated to PNOC our interest to any development in LNG,” Meralco President Oscar Reyes said in a BusinessMirror report on Oct. 1.
The PNOC was tasked by the Department of Energy (DOE) to develop an integrated LNG hub with storage, liquefaction and regassification and distribution facility, as well as a reserve initial power-plant capacity of 200 megawatts (MW).
“We are looking at it. That’s clearly an option,” Reyes added. “We have expressed willingness to be part of either pipeline gas or LNG.”
If and when Meralco pushes through with its plan to venture into LNG, Reyes said the company would have to pursue this together with “credible partners”.
“Our approach is largely to partner, rather you do it solely. We have to partner with a strategic partner because that validates your decision,” Reyes added. “Somebody else looking and saying yes to it adds credibility to the project that we are pursuing.”
Meralco was looking at venturing into LNG way back in 2015. It was then exploring a possible partnership with Osaka Gas Co. Ltd. of Japan. Both were separately engaged in the conduct of a feasibility study. No development was reported since then.
Reyes said Meralco, which has a power-generation arm, never shelved its interest in LNG.
“We continue to look at it. If in the future gas prices are competitive, then it’s back in the agenda. We will always be ready to provide the market for LNG, along with coal,” Reyes said. “In terms of offtake, we have to look what’s going to be the impact of overall generation.”
The DOE has scheduled the groundbreaking for the country’s first LNG hub in 2018.
Energy Secretary Alfonso G. Cusi said the government is aiming to turn the Philippines into a hub for LNG as natural gas from the Malampaya gas field in Palawan is expected to be depleted in less than a decade. Currently, around 3,500 MW of power-plant capacity is dependent on Malampaya, the country’s sole natural-gas source.
“We’ve started with the rollout of the Batangas LNG terminal by 2020 to safeguard against the anticipated depletion of Malampaya in 2024,” Cusi said.
LNG is natural gas that has been converted into a liquid state for easier storage and transportation. Upon reaching its destination, LNG is regassified so it can be distributed through pipelines as natural gas.
Cusi added the DOE would issue a regulatory framework on LNG soon. A public consultation is also scheduled on October 10.
PNOC President Reuben Lista said the number of interested firms wanting to partner with the state firm to pursue the ambitious LNG project has increased to 68 firms.
The proposed LNG project is still under review. The PNOC could tap the International Finance Corp., a member of the World Bank Group, for the conduct of a feasibility study.