Senate panel moves to reinforce natural-gas industry in PHL

By on May 8, 2018

The Senate Committee on Energy is eyeing remedial legislation reinforcing the Philippines’s downstream natural-gas sector well in advance of the 2024 expiration of the Malampaya gas field franchise.

Sen. Sherwin T. Gatchalian, committee chairman, is calling a public hearing on Thursday to consult industry players and regulators as the panel moves to craft a law aimed at “establishing a stronger legal framework to develop and regulate the country’s downstream natural-gas sector.”

Among those expected to provide inputs at the Senate hearing are representatives from the Department of Energy (DOE), the Energy Regulatory Commission, National Power Corp., Philippine National Oil Co. (PNOC), and the National Grid Corp. of the Philippines, BusinessMirror reported.

Confirming the scheduled committee hearing, Gatchalian said the Senate panel needs to “clarify the government’s policy on our natural-gas resources given the complexity of the industry, the current lack of an institutionalized regulatory framework and the need to replace the fuel sources of existing natural gas plants.”

In filing Senate Resolution 699, paving the way for the committee hearing, Gatchalian noted the Malampaya Gas-to-Power Project supplies fuel to three natural-gas plants with a total installed capacity of 2,700 megawatts, comprising 17.85 percent of the installed capacity of the Luzon grid and 12.49 percent of the installed capacity of the national power grid.

“Significantly, these plants served 53 percent of Meralco’s electricity demand for the March 2018 billing,” the lawmaker added.

Asserting the need to further develop the power industry in order to attract more foreign investors, Gatchalian acknowledged the importance of natural-gas in the country’s energy mix, “as well as the Department of Energy’s drive to make the Philippines a liquefied natural gas [LNG] hub and its current pronouncement of a 50 percent baseload and 50-percent midmerit energy mix.”

The senator recalled that utilization of downstream natural-gas started in 1998 “with the declaration of commerciality of the Malampaya-Camago wells, resulting in the harvesting of the first gas reserves in 2001.” He added that, in the same year, the DOE was tasked to be the lead government agency in the development of the Philippine natural-gas industry through Executive Order 66.

Recently, the DOE met with seven investors interested to put up an integrated LNG facility in the country. The agency said pre-application conferences have been conducted for the proposed LNG projects of the following potential project proponents:

Cleanway Energy Dept. Corp.;
First Gen Corp.;
Tokyo Gas Co. Ltd.;
China National Offshore Oil Corp.
PNOC;
VIRES Energy Corp.; and
SK E&S Co. Ltd.
Likewise, the two pre-application conferences have been scheduled for the proposed LNG projects of Carmine Energy Pte. Ltd. and DeEnergy International Corp.

In all, there are nine LNG investors.

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