Total plans LNG investment in PH

by Myrna Velasco – January 21, 2016

from Manila Bulletin

Officials of French petroleum giant Total S.A. are reinforcing their company’s plan to invest in a multi-billion liquefied natural gas (LNG) terminal in the Philippines, an official of the Department of Energy (DOE) has disclosed.

Energy Undersecretary Donato Marcos told reporters that the executives of the French firm just paid a visit to Energy Secretary Zenaida Y. Monsada recently; and one aspect of discussion had been on their plan to venture in LNG import facility.

“They just paid a visit before the Secretary left for Abu Dhabi (United Arab Emirates),” he said, in reference to Monsada’s trip for the International Renewable Energy Agency (IRENA) event. “They are planning to invest in LNG terminal,” the energy official has reiterated.

The deep-pocketed French company initially sounded off its investment plan for LNG facility in the country years back, hence, the recent visit had been viewed by the DOE as some sort of renewal of that interest.

Marcos said the intent of multinational firms – including that of Royal Dutch Shell plc, plus the keen interest of local players to put up LNG terminal in the country have been giving the government second thoughts on proposed state-owned or public-private partnership (PPP) arrangement of capital outlay on LNG terminal.

Nevertheless, he stressed that all options lodged by industry players are being weighed by the energy department – and will eventually decide what will work viably for the gas industry, the consumers and the Philippine government.

Some players in the power sector have been advancing proposals on how the government must handle the LNG terminal investment component which is geared towards ensuring the country’s gas supply security.

For the entire energy sector, players are finally realizing that “the future of gas” must now be the focus of policy formulations and investment invitations.

The DOE is setting forth proposals on a fuel mix policy that shall determine the place of gas in the country’s power mix and even in other business segments (i.e. transport and industrial users) where gas could be an acceptable and cost-feasible alternative.

One major consideration that has been compelling State policy framers and regulators to seriously sit down and flesh out the future of gas is the well-anticipated lapse of the Malampaya service contract in year 2024.

The service contractors of the gas field led by Shell Philippines Exploration B.V. have long indicated that gas extraction at that time will already be on significant decline, thus, an option is desperately needed.