Philippines: PNOC P500M budget allocation for new LNG hub questioned by Senate

Philippines: PNOC P500M budget allocation for new LNG hub questioned by
Senate

DOE-LED PHILIPPINE NATIONAL OIL CO. (PNOC) WAS ASKED TO CONDUCT A
FEASIBILITY STUDY ON THE CURIOUS INCLUSION OF A P500 MILLION BUDGET FOR ITS
LNG PROJECT TO ENSURE IF THE GOVERNMENT SHOULD INVEST INTO IT, THE SENATE
COMMITTEE ON ENERGY SAID.

In a panel meeting, PNOC Senior Vice President for Management Services
Glenda Martinez was questioned about the agency's request, to which she said
the property allocation is for the LNG project's development.

"Presently, we have several locations that we are looking at. From those
real estate properties, we are providing for the acquisition of those," she
said.

However, Senator Sherwin Gatchalian pointed out the request will only be
approved if the DOE arm will submit a feasibility study on the project.

"I admire the bold vision of the [Department of Energy] Secretary [Alfonso
Cusi] to go into this LNG hub. It's really a vision for the energy future of
the country. But of course, we need to study this very carefully. we would
also have to clear the feasibility as well as the potential of this
project," Gatchalian said.

The big-scale LNG proposal will be built to supersede the Malampaya plant
after its depletion by 2024. DOE Chief Alfonso Cusi said the upcoming LNG
facility is expected to supply 3,500-MW of power capacity normally released
by the aging Malampaya.

Cusi added the PNOC volunteered to revise its budget proposal and submit it
back to the Senate Sub-Committee on Finance on the next hearing with the
National Electrification Administration and National Power Corporation.

"We will look into that, why we're going to buy that land. But that
feasibility study, I know, the private proponents, like China and Japan,
they make their own study and that was submitted to PNOC and that is the
basis of PNOC in making the decision," he said.

Earlier, the DOE directed the PNOC to develop an integrated LNG hub complete
with storage, liquefaction, regasification, and distribution facility, along
with an initial power reserve of 200-MW power capacity.

The state-run agency was also looking into a government-to-government (G2G)
partnership for the project with a $640 million budget of banked gas and
land as forward equity, to which has attracted at least 26 interested
investors from China, Indonesia, Japan, Singapore, South Korea, and the
United Arab Emirates (UAE).

But the PNOC failed in finding the right collaborator before its end-July
deadline. Since then, the Energy Department decided to include the private
sector's participation in investing in the LNG hub.

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Link to Original Article:
http://powerphilippines.com/2017/08/25/pnoc-budget-allocation-lng-hub-senate
/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com