Research firm bullish on PH LNG industry

The Philippines will have a thriving liquefied natural gas (LNG) industry within a few years and will have a capacity of 7 million metric tons yearly (mtpa) by 2020, the earliest estimate when indigenous fuel from the Malampaya gas field would run out.

The forecast is from Poland-based research firm Energy and Natural Resource Reports, which is very bullish considering that building a big-ticket LNG facility would take more than three years to accomplish.

The domestic industry is seen reaching such a milestone “driven by investments in new LNG capacity,” the research firm said.

“Currently, companies in the industry continue to face tough challenges of shaping their strategies to rapidly changing global dynamics,” it added.

The estimated capacity that would be reached within three years is about twice the current domestic consumption of natural gas.

Industry players peg this at about 3.5 mtpa, taking into account the demand from five existing gas-fed power plants which are all in Batangas.

These include the 1,000-MW Sta. Rita complex, 500-MW San Lorenzo facility, 414-MW San Gabriel plant and the 97-MW Avion plant—all part of the portfolio of First Gen Corp.

The fifth facility is the 1,200-MW Ilijan power plant, which is now part of the San Miguel group’s energy portfolio.

Last week, the Asian Development Bank (ADB) said it had entered into an agreement with Philippine National Oil Co. (PNOC) to act as transaction adviser for state-run firm’s plan to put build in Batangas the country’s first liquefied natural gas (LNG) facilty.

“The Philippines’ first LNG hub will help in ensuring long-term energy security to the Philippines and source a cleaner energy resource,” Siddhartha Shah, ADB’s principal PPP specialist, said in a statement.

“It will also increase energy access and create new demand in the power, transportation and industrial sectors in Luzon and in neighboring islands,” Shah said.

Under the agreement, ADB’s Office of Public-Private Partnership will help PNOC “in all aspects” of the project, including the award and execution of the final project agreements.

The planned facility, which could cost up to $2 billion, will consist of a regasification terminal, storage, power plant, and other related infrastructure.