Uy allowed to review $2-billion LNG project

By MYRNA M. VELASCO – February 21, 2020, 10:00 PM
from Manila Bulletin

The Department of Energy (DOE) announced that it has already approved the application of Uy-led Tanglawan LNG Philippines Inc. for the suspension of its proposed $2 billion liquefied natural gas (LNG) onshore terminal and power projects, allowing the company to review its position.

“Tanglawan asked for suspension of their application because of the development of the Chevron shares acquisition. We will allow them to re-evaluate their position,” Energy Secretary Alfonso G. Cusi told reporters.

The LNG terminal project of businessman Dennis Uy’s Phoenix Petroleum Philippines Inc. and China National Offshore Oil Corporation (CNOOC) had been problematic from the start – that even its targeted site had been denied by the party it has negotiated with.

Even the partnership explored with state-owned Philippine National Oil Company (PNOC) never flourished, as talks slowed down around second half of last year – then what came next was the move to seek suspension on the project’s implementation.

That followed an announcement of Uy to acquire the 45-percent stake of Chevron for $565 million in the multi-billion Malampaya deep water gas-to-power project, but he has yet to “bring in the check” before he can firm up that merger and acquisition deal.

Cusi told media since the transaction between Uy’s Udenna Corporation and Chevron is a private transaction, he is not privy to any development if payment had already been made or when is the lapse period imposed by the American firm for its buyer to complete financial closing.

With the Tanglawan project getting shelved, the DOE can just count on two prospective project sponsors for the setting up of the country’s liquefied natural gas (LNG) import facility – those proposed by the joint venture of First Gen Corporation and Tokyo Gas Co. Ltd; and of US firm Excelerate Energy.

The development model propounded by the First Gen-Tokyo Gas tandem will start with floating storage and regasification unit (FSRU) before moving on to a more permanent onshore terminal; while Excelerate opts for a pure FSRU installation.

The energy chief admitted though that none of the project proponents had submitted any application to the DOE yet relative to plans of advancing their targeted facilities to construction phase.

The plan of the LNG project sponsors would be to bring in imported LNG into the country by latter of next year to early 2022 – in time for the lapse of the gas sale and purchase agreement (GSPA) of the 1,200-megawatt Ilijan power facility.