Phlippines: Energy dep't eyes private sector participation in LNG facility

Phlippines: Energy dep't eyes private sector participation in LNG facility

THE Department of Energy (DoE) may turn to the private sector anew for the
development of an integrated facility for liquefied natural gas (LNG)
estimated to cost $2 billion.

Energy Secretary Alfonso G. Cusi, who chairs the board of Philippine
National Oil Co. (PNOC), told reporters on Wednesday he has yet to receive a
proposal from the state firm, which was evaluating offers from six countries
to develop an LNG facility in the country.

"Wala pa... Hindi pa sila nakakapili," Mr. Cusi said on the sidelines of the
48th founding anniversary of the National Electrification Administration in
Quezon City.

PNOC Technical Adviser Arwin L. Ardon said last month that the company has
received proposals from China, Japan, South Korea, Indonesia, Singapore and
the United Arab Emirates.

PNOC had aimed to submitted a recommendation to the DoE by the end of July.

Asked if the government is now open to accepting unsolicited proposals from
the private sector, Mr. Cusi replied: "Yes, we will open (the project to the
private sector) to get what is really beneficial for the country."

Before the LNG facility became a government-to-government project, the PNOC
had been swamped with unsolicited proposals from 55 domestic and foreign
entities.

The DoE is sticking to its target of breaking ground on the LNG project next
year despite the delay.

"Hahabulin namin 'yan. Mas importante (We are pursuing that plan. It is more
important) that we do it properly para sigurado na matatapos (so we can
ensure its completion)," Mr. Cusi said.

The LNG "mega project" has several components, including gas storage
facility with a capacity of five million tons per annum and a power plant
with an initial capacity of 200 megawatts but scalable to 1,000 MW.

Aside from the storage facility and the power plant, the proponents
submitted proposals for an integrated facility with components for
liquefaction, regasification and a floating storage regasification unit,
PNOC's Mr. Ardon said.

In June, Mr. Cusi said the DoE was planning the construction of a common
receiving and distribution infrastructure for LNG -- considered the
"cleanest" of all fossil fuels -- that is aimed at making the country
Southeast Asia's hub for the energy resource. The facility is planned to
rise on a PNOC-owned property in Batangas.

Mr. Cusi previously said the facility would cost around P100 billion and
targeted for completion by 2020, which should give the country enough lead
time ahead of the anticipated depletion of the Malampaya natural gas find in
2024. The offshore Palawan platform supplies gas to several power plants in
Batangas. It powers up to 20% of the country's electricity requirements.

After the DoE selects the winning proponent, the next step would be to
evaluate the project cost, which will involve the National Economic and
Development Authority, as well as the Department of Foreign Affairs.

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Link to Original Article:
http://www.bworldonline.com/content.php?section=TopStory&title=energy-dept-e
yes-private-sector-participation-in-lng-facility&id=149227

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com