Brunei state oil company signs agreement with PNOC
Investment opportunities in LNG in Mindanao
Petroleum National Brunei, the national oil company of Brunei Darussalam, has signed an agreement with state-run Philippine National Oil Co. to jointly implement investment opportunities in the liquefied natural gas (LNG) and upstream oil sectors here.
According to a document from the Department of Energy, the signing of the agreement was an offshoot of the visit conducted by Petroleum Brunei and Brunei LNG Corp. in Mindanao last October.
“Petroleum National Brunei is keen on the proposed floating, storage regasification unit (FSRU) project in Mindanao, in which a delegation from Petroleum Brunei and Brunei LNG, together with PNOC and the DOE, conducted a visit in the proposed site in Phividec,” the document stated.
The DOE noted that in the first quarter of 2012, the World Bank provided a technical assistance to the energy agency in identifying an appropriate location for an FSRU. The Macajalar Bay at the Phividec industrial complex in Tagoloan, Misamis Oriental, was deemed a favorable location for the project due to its great marine characteristics, allowing lowest cost terminal option in the area, the DOE explained.
The site also has Mindanao’s most concentrated industrial load and has access to transmission, it added.
As early as September this year, the DOE, then under former Energy Secretary Jose Rene D. Almendras, disclosed Brunei’s interest to put up LNG facilities in Mindanao, which may include the construction of a 300-megawatt gas-fired power plant to serve as an anchor load.
Almendras earlier explained that it was the Philippine government that extended the invitation to Brunei to “have a serious look at the LNG prospects in Mindanao” during the 20th Asia Pacific Economic Cooperation (Apec) leaders’ summit in Vladivostok, Russia, last September.
Should the proposed investments push through, the LNG project in Mindanao will not only be a first for the island, but will also mark the first foray of the Brunei government into LNG downstream investments outside its country.
The move to invite investors to look at prospective LNG projects in Mindanao was aligned with the Philippine government’s efforts to provide more sustainable solutions to the perennial power supply problems on the island.
The Philippine government has since been pushing for the use of alternative fuels such as natural gas as this can help address spiraling fuel prices in the long run, an expected diminishing petroleum supply as well as the looming environmental problems.
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