Phoenix, CNOOC tie-up taps state firm in crucial LNG project

A venture between Phoenix Petroleum Philippines Inc. and a China-owned firm has named the Philippine National Oil Co. (PNOC) as a potential third partner for a planned liquefied natural gas (LNG) facility in Batangas.

The agreement signed on Feb. 28 also gives PNOC the opportunity to make an equity investment in Tanglawan Philippine LNG Inc. as well as in other companies relating to the LNG project. Tanglawan is the joint venture between Phoenix and China’s CNOOC Gas and Power Group Co. Ltd.

“We warmly welcome the potential addition of PNOC in the LNG hub project we have been planning to venture on with CNOOC G&P,” Phoenix Petroleum chief operating officer Henry Albert Fadullon said in a statement.

“The LNG hub is a crucial project that will provide long-term solutions for our country’s energy needs, and the strategic alliance among our companies will further secure the continuous development of this venture,” Fadullon said.

Phoenix earlier said it expected to break ground for an LNG regasification and receiving terminal “within this year.”

The facility, intended to have an initial storage capacity of 2.2 metric tons per year, is scheduled to start commercial operations by 2023.

Phoenix and CNOOC also plan to develop a gas-fired power generation facility with up to 2,000 megawatts of installed capacity.

“The project will help support the demand for a clean, competitive and environment-friendly energy source in Luzon, and provide energy security for the country,” Fadullon said.

PNOC has been the front-runner in what is expected to be the replacement for the Malampaya natural gas project, which is expected to run out of supply in the next several years.

Various foreign entities have asked PNOC for a stake in its own LNG project, but the state-run firm had said it was now only interested in participating in a similar endeavor at a maximum interest of 10 percent.

For Phoenix, partnering with PNOC makes sense considering the state firm’s capabilities and assets in terms of pipeline infrastructure and franchise, banked gas, etc.

Banked gas refers to the unused fuel from the Malampaya project.