Shell may power up remote islands using natural gas

Pilipinas Shell Petroleum Corp. hopes to supply the small islands around the country with natural gas for power generation once its proposed floating regasification terminal for liquefied natural gas (LNG) in Batangas has been completed.

Roberto S. Kanapi, vice president for communications of Pilipinas Shell, on Friday said this was what the company had in mind all along, “to be able to transfer the gas to the small islands, those [that] can put up power plants to be fed by LNG.”

Kanapi said the proposed regasification terminal to be built near Pilipinas Shell’s 110,000-barrel-a-day oil refinery in Tabangao, Batangas, would be the first floating facility to be put by Royal Dutch Shell Plc in Southeast Asia.

It is but natural for Royal Dutch Shell to look into LNG prospects in the Philippines as it is currently the No. 1 distributor of LNG in the world, Kanapi explained.

The executive did not reveal the amount the company would invest to build the LNG terminal. But hefty capital is needed to construct such a terminal, as can be seen from the proposed regasification facility and terminal under the Philippine government’s Batangas-Manila natural gas project, which already requires some $1 billion.

“That is why we are doing the study, so we cannot yet cite [investment figures]. The study is going to be technical and commercial to see how much the actual cost will be,” Kanapi said.

The feasibility study is expected to be completed by 2012 with a “first gas” target date in 2016.

“We are doing the study now on how to set this up. It is a breakthrough as far as LNG is concerned in the Philippines. Now, this is already a definite study, an action. Our advantage here is that we have the location in Batangas, which is near our refinery,” Kanapi explained.

Last Wednesday night, Shell signed a memorandum of understanding with the government, formalizing its commitment to look into the construction of an LNG import regasification terminal.

The government, through the Department of Energy, is developing a natural gas master plan in order to diversify the country’s energy sources to address the increasing demand for power and support economic growth of the country.  Amy R. Remo