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Foreign companies interested in PH natural gas projects

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MANILA, Philippines—Companies from Australia, Italy, China, including Hong Kong, and South Korea have signified their intentions to invest in the highly capital-intensive Philippine natural gas sector, expressing interest in building either  a liquefied natural gas (LNG) terminal, pipeline or a gas-fired power plant, the Department of Energy said.

Energy Undersecretary Jose M. Layug Jr. identified these foreign companies as First Pacific Capital, and Energy World from Australia; ENN Energy Holdings from China; Synergy International of Hong Kong; ENI-Saipem of Italy; and SK Engineering and Construction Co. Ltd., Korean Western Power, BW Ventures and Hyundai Merchant Marine, all from South Korea.

GN Power Ltd. of the Netherlands, which is currently building a 600-megawatt coal facility in Mariveles, Bataan, also plans to participate in the local natural gas industry. There are also three Indian companies interested in helping the Philippine government put up the necessary LNG infrastructure, but Layug did not identify them.

Apart from the foreign companies, local firms are likewise seeking active participation, including the state-run Philippine National Oil Co.; listed firm Abacus Consolidated Resources, which will be partnering with ENI-Saipem of Italy; and the Lopez-led First Gen Corp., Layug disclosed.

“We are completing our Master Plan for Natural Gas through technical assistance from Japan International Cooperation Agency (Jica) and World Bank by yearend. After we complete the plan, and the results are favorable, then we will conduct public bidding for such infrastructures next year,” Layug said.

The Department of Energy initially estimated that $5 billion in fresh investments would be needed to fully develop the country’s downstream natural gas industry.

Based on the original masterplan, investments were needed to construct 423 kilometers of transmission and 504 sq. km. of distribution pipelines. Priority projects include a 140-km pipeline from Bataan to Manila (BatMan 2); 40-km Edsa-Taft loop; 35 km from Sucat to Malaya; 40 km from Batangas to Cavite (BatCave); 35 km from Rosario to Biñan (RoBin); 100 km from Batangas to Manila (Batman 1); and the 30-km Calaca-Spurline (CatLine). These investments also included greenfield power plant projects that could generate a combined 3,000 MW and power plant conversion projects that could generate some 600 MW.

The expected JICA-WB Master Plan for Natural Gas will re-evaluate these opportunities and identify which infrastructure will be deemed  priority projects, and what kind of investments will be needed. It will also evaluate the viability of importing natural gas and the potential sources.

Pppossible LNG sources include Indonesia, Malaysia, Qatar, the United States and Australia, which is known to hold huge natural gas deposits, Layug said earlier. The Malampaya gas power project, which currently provides natural gas to three facilities in Luzon, will not be the main source of gas, he added.

“Malampaya will not have a role in the masterplan other than what they are providing for currently. The masterplan hopes to provide infrastructure for LNG imports which we expect to be much cheaper because worldwide, the price of LNG is going down. We will import LNG. There’s a lot of supply and the Philippines is being looked at by the LNG industry as a potential market—that’s why they’re knocking on our doors,” Layug said.

Energy Secretary Jose Rene D. Almendras has been pushing for alternative fuels such as natural gas given the global oil price volatility, to which the Philippines is highly vulnerable as it sources most of its fuel requirements abroad.

Natural gas is deemed to be among the more feasible alternatives that will allow the country to diversify its energy and transport fuel sources.

The country’s natural gas resources are estimated at 2.135 trillion cubic feet of natural gas.


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