Govt should be allowed to build LNG plant – official

By Jordeene Sheex Lagare – June 27, 2018
from The Manila Times

AN Energy official wants a provision allowing the government to take over a private firm’s place if it withdraws from building a planned integrated natural gas (LNG) facility included in a bill aimed at developing the country’s natural gas industry.

In a briefing on the 6th E-Power Mo Conference at the Department of Energy’s (DoE) head quarters in Taguig City on Tuesday, Energy Assistant Secretary Leonido Pulido 3rd said the measure that Sen. Sherwin Gatchalian was planning to craft “should include a provision that says if no third-party private investor comes in,]the government should be ready to step in and invest in” the LNG plant’s construction.

His remarks came after Gatchalian, chairman of the Senate energy committee, said last Thursday that he was eyeing such a bill before the franchise for the Malampaya Deepwater Gas-to-Power Project in offshore Palawan province ends in 2024.

They also came after the Energy official proposed the inclusion of a provision on incentives for companies seeking to enter the industry during a Senate energy panel hearing on Senate Bill (SB) 765, or the Downstream Natural Gas Industry Development Act, on June 18.
According to Pulido, the department expects 11 firms to submit a more complete application for the project.
“Based on the reports they have given us, we feel that within the third or fourth quarter of this year, we would be receiving more concrete applications,” he said.

“We’re pretty confident [that]a lot of discussions that they are having right now are…nearing maturation,” he added.

The DoE is still drafting policies to address the concerns these companies raised, such as financing and the expiration of some power supply agreements (PSAs) between 2021 and 2022, according to the official.

“We’re still developing that. We will have to review it and have the secretary approve it,” Pulido said.

Companies that have shown interest to build the facility included the Philippine National Oil Co. (PNOC), Tokyo Gas Co. Ltd., Cleanway Energy Dept. Corp., First Gen Corp., China National Offshore Oil Corp. (CNOOC), Vires Energy Corp., SK E&S Co. Ltd., Transformation Llc, and Carmine Energy Pte. Ltd.

The planned facility is governed by the Philippine Downstream Natural Gas Regulation (PDNGR), promulgated last December. It paved the way on making the country an LNG trading and transshipment hub for the Asia-Pacific region.