Vires Energy Corp. (VEC), a subsidiary of listed A Brown Co., has decided to junk its liquefied natural gas (LNG) terminal project in Batangas.
In a disclosure, the company said a notice was sent to the Department of Energy (DOE) on Friday. This came more than three years after it obtained the government’s go-signal to proceed with the development.
“VEC has decided, given recent industry developments, to forgo constructing an LNG terminal and instead adopt the third-party access (TPA) model, which involves the purchase of gas from third-party gas sources through long-term gas supply agreements,” it said.
“It has been determined that the adoption of the TPA model will give the optimal approach for the VEC project moving forward,” the firm added.
READ: DOE approves 7th LNG project amid power woes
Vires Energy did not provide specifics on the reason behind this move.
Sought for comments, Seedbox Securities Inc. equities trader Jayniel Carl Manuel told Inquirer that “shifts in the global energy landscape, changes in LNG supply dynamics, or evolving regulatory and market conditions,” might have influenced Vires Energy’s decision.
“By adopting a third-party access model, Vires Energy can leverage established and existing infrastructures in Batangas, which allows them to streamline the process and avoid the significant capital outlay and time required to build a new LNG terminal,” he added.
The company said it would still pursue a 2×450-megawatt LNG combined cycle power plant, which will be situated on a 15-hectare onshore site in Batangas.
Long-term goals
Vires Energy noted its withdrawal from the construction of the terminal would not harm the planned power plant.
It was also exploring ways to link the plant to existing gas pipelines to access gas from third-party LNG terminals and indigenous gas supply from Malampaya.
“[This] aligns with their long-term goals as companies are increasingly looking for more efficient ways to achieve energy generation targets while minimizing risks associated with large-scale infrastructure investments,” Manuel said.
“The strategy may seem not only to shorten the timeline for bringing new power generation capacity online but also reflects a pragmatic approach to navigating the complexities of the energy sector today. Vires Energy’s decision underscores their commitment to adaptability and ensuring the most effective use of available resources to achieve their objectives,” he added.
BMI, a unit of Fitch Group, also released a report on Friday, expressing its optimism about the country’s LNG imports amid energy players’ investments in infrastructure buildup. Energy Secretary Raphael Lotilla earlier said LNG was a welcome addition to the country’s power supply mix, especially as demand continues to grow.