PNOC seeks partners for $600-M LNG hub

Philippine National Oil Co. (PNOC) is starting within 30 days an open tender to choose a partner or partners for its planned Batangas LNG Hub, tagged at about $600 million or P32.3 billion.

This happens after PNOC’s rejection of at least seven unsolicited proposals from various parties based here and abroad as well as a counteroffer from First Gen Corp., which invited the state firm to be its partner in a similar planned project.

PNOC senior vice president Glenda G. Martinez, who heads PNOC’s technical working group for the LNG project, said in a press briefing the tender process was being pursued given “the strong interest from the private sector.”

She added that going the way of a tender firmed up PNOC’s new policy of entertaining only solicited proposals.

“Interested participants will be expected to satisfy legal, technical and financial capabilities that PNOC has developed together with its advisors, the Asian Development Bank, till the project reaches financial clos[ing],” Martinez said.

PNOC officials said they expected “more than 40” parties to participate in the tender process, considering that representatives of “more than 70” entities had visited them regarding the LNG project.

“PNOC, as the government entity whose mandate and responsibility is to develop the oil and gas sector in the country, is in the best position to deliver this project for the country,” Martinez said.

She said a prequalification tender would be launched this month, and that the selection would be streamlined to ensure that the LNG project would be commercially operational “before the end of the Service Contract for the Malampaya gas exploitation in 2024.”

Martinez also said the LNG hub would have a minimum storage capacity of 3 million tons per year (mtpa)—which is enough to provide fuel to existing gas-fired power plants, which together account for at least 3,000 megawatts of generating capacity—“with future increase to 5 mtpa.”