The Philippines is “in dire need” to bring in supplies of liquefied natural gas (LNG) from overseas as an expected decline in output from the Malampaya project approaches, according to Fitch Solutions.
Fitch Solutions noted in a commentary the Malampaya field, currently the Philippines’ only source of natural gas, represented 15 percent of domestic electricity generation but was “rapidly declining [and] is widely expected to be depleted latest by 2027.”
And while the Department of Energy has been showing reluctance in extending the Malampaya consortium’s service contract, efforts to find alternative indigenous sources were taking time, Fitch Solutions said.
Considering this, “[f]rom a price standpoint, the next few years is likely to prove an opportune time for the Philippines to commence LNG imports,” the company added.
Fitch Solutions also said global LNG prices should be relatively low in the next few years amid expectations of increasing output, especially from the United States and Russia.
“The Philippines has yet to enter into any LNG supply contracts for its terminals, and as such, will prove an attractive market for the growing legion of LNG suppliers globally,” it said.
There are two LNG facilities that are under construction in the Philippines.