DOE reminds EWG of LNG project’s 2-year delay

By Lenie Lectura – March 13, 2019
from Business Mirror

ENERGY Secretary Alfonso G. Cusi has called the attention of Energy World Gas Operations Philippines Inc. for the more than two years of delay in its liquefied natural gas (LNG) project.

“It’s hurting us. It’s affecting our planning because that is a committed capacity. That is already counted as a committed capacity and we have projected when they will be online. They have been delayed for more than two years,” Cusi said.

The Department of Energy (DOE) awarded Energy World Gas a permit last December 21 to proceed with the construction and operation of the LNG import terminal and regasification facility in Pagbilao, Quezon.

With the permit, EWG said it would be able to align the completion of the first tank of the LNG hub with the commercial operation date of its planned 650-megawatt (MW) power plant.

The terminal will consist of two full containment onshore tanks with a pumpable capacity of 130,000 cubic meters of LNG each.

The facility also consists of a dedicated jetty and marine infrastructure for the loading and unloading of LNG ships, as well as regasification, control center and workshops and other ancillary facilities.

The permit, issued on December 21, 2018, provides EWG 24 months to construct the LNG hub from the issue date.

There is no penalty, however, imposed on power firms who fail to deliver their commitment on time.

“We can only continue to investigate. We can only push for the project and encourage them to complete it,” Cusi said.

The DOE has been trying to encourage proponents of an LNG import terminal ahead of the depletion of the Malampaya natural gas.

The Malampaya gas-to-power facility fuels three gas-fired power plants with a total generating capacity of 2,700 MW equivalent to 30 percent of the power-generation requirements of Luzon.

“We are also aspiring for our own energy security. We will continue to explore. We want to continue to have the gas. So, I don’t think it is an issue why we should be doing LNG now if there is still gas left,” Cusi said.

Malampaya’s service contract will expire in 2024. The consortium operating the gas field has filed for license extension. The DOE may tap foreign consultants to help the agency determine if it will extend the service contract.

“Options are all being studied whether for renewal, for new operator, or government takeover,” Cusi said,

Energy Undersecretary Donato Marcos said they are talking with Wood Mackenzie and IHS Market for the conduct of an independent study.