China, Japan compete for $2bn Philippine gas project

China, Japan compete for $2bn Philippine gas project

China and Japan are competing for a $2-billion liquefied natural gas (LNG)
project in the Philippines, Energy Secretary Alfonso Cusi told the Nikkei
Asian Review.

Over 20 companies from eight countries have proposed partnerships with
state-owned Philippine National Oil Corp. for an LNG receiving terminal at
the southern part of Luzon island. Cusi said his team is still reviewing
funding and technology options.

"We are talking to China [and] Japan," he said. "We are looking at which can
offer the best in terms of funding. It's too early to say who is more
advanced -- there are so many things to look into."

Countries that offer the best financing options usually pick their own
domestic contractors. Cusi said Tokyo Gas, Osaka Gas, and a number of
Chinese state-owned and private companies have shown interest.

Cusi is vice chairman of President Rodrigo Duterte's PDP-Laban party. He has
traveled to Beijing and Tokyo this year to solicit energy investments for
the Philippines, which runs into alerts and price spikes for electricity
whenever the country's lone LNG facility undergoes maintenance.

Cusi said he plans to travel to South Korea and Russia, and does not favor
any particular power-generating technology. He said Malampaya, the only
source of natural gas in the Philippines, is expected to be exhausted by
2024. The gas field operated by a consortium led by Royal Dutch Shell
provides 40-45% of Luzon island's power requirements. Luzon accounts for
two-thirds of gross domestic product in the Philippines.

The proposed terminal could import LNG from other countries while alternate
Philippine resources are being developed. These include gas fields in the
South China Sea in dispute with China. The terminal's plant will initially
generate around 200 megawatts, but can expand to 800MW. Cusi hopes to find
an investor this year.

Duterte is targeting total household electrification before he leaves office
in 2022. As of December, over 90% of households had access to energy. Cusi
also said he is studying the possibility of activating a $2 billion nuclear
power plant on the Bataan peninsula. The project, initiated under President
Ferdinand Marcos in the 1970s but never activated, is located near an
earthquake fault line.

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Link to Original Article:
http://asia.nikkei.com/Business/Companies/China-Japan-compete-for-2bn-Philip
pine-gas-project

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com