Australia is eager to become a major supplier of liquefied natural gas (LNG) to the Philippines, wanting to fill the supply gap resulting from the depletion of energy resources in Palawan.
The Australian Philippine Business Council (APBC) said energy firms from Australia are keen on doing business in the Philippines given the substantial LNG resource in their country.
Edward Alcordo, president of APBC, told reporters Thursday that Australia was becoming a bigger global player in the energy sector given its resources. He said Australia expects to become the world’s biggest LNG supplier by 2018.
Alcordo said Australian energy firms were interested to be part of the Philippine governmet’s Publi-Private Partnership (PPP) program.
Through the PPP program, he said, Australian firms can invest in the establishment of a gas terminal in an appropriate location in the Philippines through which LNG may be supplied.
Alcordo said the APBC was awaiting a PPP proposal from President Aquino that will detail how potential investors may be protected against political risk.
He said potential investors from Australia were expecting the PPP proposal to specify a mechanism whereby compensation will be given by the government in case investments are disrupted due to political factors.
“Australian firms are excited about what the President mentioned about the potential PPP provision on political risk. They are awaiting the final policy on this,” Alcordo said at the sidelines of the APBC forum held in Makati City.
He said protection against political risk, such as change in regulatory environment, was necessary because energy investments are significant and are normally implemented over the long term.
Alcordo said a gas terminal alone cost $1 billion to put up. Moreover, required investments in related infrastructure and facilities are estimated to cost $1.2 billion a year for a span of 15 years.