MANILA -More US companies are looking to invest in the Philippines’ liquefied natural gas (LNG) space as reserves at the Malampaya gas field continue to deplete.
Energy Secretary Raphael Lotilla recently told reporters that American companies saw LNG as a “bridge” to help reach the Philippines’ renewable energy transition goal.
“We see that as an important function in bridging the gap between what we have right now, which is a declining Malampaya production, and the continuing growth of the energy needs of the country,” he said.
This was among the key discussions on the energy sector during President Marcos’ recent visit to the White House, according to Lotilla.
Looming crisis
The energy chief also underscored the need to find a “successor” to the depleting Malampaya gas field for additional supply, noting that LNG could help address the looming power crisis.
In February, Malacanang said it was reviewing Prime Infrastructure Capital Inc.’s proposal to extend the Malampaya concession, or Service Contract 38 (SC 38), that is set to expire next year.
Prime Infra subsidiary Prime Energy Resources Development BV is a member of the consortium operating SC 38.
The company holds a 45-percent stake in the project, while other members–UC38 LLC and PNOC Exploration Corp. own 45-percent and 10-percent stakes, respectively.
Running dry
Prime Energy’s extension application comes as output from the Malampaya gas field is expected to run dry by 2027.
This has also further encouraged local energy companies to invest in and explore the LNG business, including conglomerate San Miguel Corp. (SMC).
SMC, through its subsidiary SMC Global Power Holdings Corp., is set to reopen the 1,200-megawatt (MW) Ilijan gas-fired power plant on May 26 to boost the country’s power supply.
The firm recently announced that it had received the country’s first LNG cargo through the Batangas terminal of global logistics company Atlantic, Gulf & Pacific International Holdings.
Integrated energy and mining company Semirara Mining and Power Corp., meanwhile, said it was exploring the possibility of adding LNG in its coal-dominant portfolio.
Semirara, the country’s largest coal producer, also operates a power generation business with an installed capacity of 900 MW.
However, energy think tank Center for Energy, Ecology and Development earlier warned that importing LNG supply could expose consumers to higher electricity rates due to highly volatile global fuel prices. INQ
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