Energy approves LNG hub proposal of Uy, China firm

By Alena Mae S. Flores – January 10, 2019 at 07:35 pm

The Energy Department said Thursday it approved the application of Tanglawan Philippines LNG Inc. of businessman Dennis Uy and CNOOC Gas and Power Group Co. Ltd. to develop the country’s first liquefied natural gas terminal.

Energy Undersecretary Donato Marcos confirmed the approval of the issuance of a notice to proceed to Tanglawan but did not provide more details.

Rino Abad, Energy director for oil and natural gas, said the application effectivity date was Dec. 21, 2018.

Tanglawan, the joint venture of CNOOC Gas and Power Group Co. Ltd. and Phoenix Petroleum Philippines led by Uy,  submitted its proposal to the DoE for an LNG facility in October.  CNOOC is a subsidiary of China National Offshore Oil Corp., China’s largest LNG importer, and terminal operator.

Phoenix signed a memorandum of understanding with CNOOC in June to study, plan and develop an LNG receiving terminal project in the Philippines.

“As provided by PNGR (Philippine Downstream Natural Gas Rules), the requirements for the next six months (extendable for another six months based on valid reason) is for the company to get all the permits from other government agencies, ECC, NICP, if applicable, LGU endorsement, etc and financial closing. Upon compliance it can now proceed to construction,” Abad said.

Energy Secretary Alfonso Cusicommitted to decide on Tanglawan’s application by December.

Tanglawan is one of the more than 20 parties that expressed interest to participate in the DOE’s selection of investor who will build the country’s first LNG hub

Marcos earlier said Tanglawan’s proposal was ahead of its rivals although other serious bidders included US-firm Chevron with partners Jera Co. and NYK and Japanese company Tokyo Gas with partner First Gen Corp.

He said another company, Limay LNG Power Corp., also submitted an application only for an LNG power plant and not a terminal.

Excelerate Energy L.P., a US-based LNG company located in The Woodlands, Texas also submitted its application for an LNG facility.

Marcos said applications should “prove to us it has commercial viability so we can be assured of the success of the project.”

He said Tanglawan’s proposal involved the construction of a 5-metric-ton per annum onshore LNG terminal in Batangas.

“They are looking at two sites.  They have a memorandum of cooperation or understanding with AG&P and they are also looking at NDC (National Development Corp.) land,” Marcos said.

Marcos said Tanglawan did not identify the existing natural gas plants in Batangas as their captive market but was looking at building its own natural gas plants with over 1,000 megawatts of capacity.

The government wants to put in place the LNG terminal by 2020 to safeguard against the anticipated depletion of the Malampaya gas facility starting 2024.