JICA to turn over updated study on Philippine natural gas industry

MANILA, Philippines—The Japan International Cooperation Agency (JICA) is to turn over to the Philippine government on Thursday an updated study and a set of recommendations to develop the Philippine natural gas industry, a program seen to help secure the country’s energy future.

According to the Department of Energy, Tomoyuki Uda of the JICA head office in Tokyo; Takahiro Sasaki, chief representative of JICA in the Philippines; and Takeshi Kikukawa, head of the JICA study team will be at the event slated Thursday afternoon for the presentation of the final report.

Industry stakeholders, who have since expressed interest in investing in the Philippine natural gas sector, will be present at the unveiling of the JICA study. Representatives of San Miguel Global Power, the Lopez-led First Gas, National Power Corp., Manila Electric Co. and its subsidiary, Meralco PowerGen, Aboitiz Power Corp., FDC Utilities and EEI Power Corp. are expected to attend.

Other stakeholders expected at the event are Sumitomo, Marubeni, the Lopez-led First Philippine Industrial Corp., Samsung, Shell Philippines Exploration BV, Chevron, state-run Philippine National Oil Co. and its subsidiary, PNOC Exploration Corp., Synergy-ENN, GMCP Mariveles, Energtek Philippines, Federation of Philippine Industries, EEI Mitsubishi Corp., JGC Philippines, Logistics and Marketing Philippines, Marubeni-Itochu Steel, and Bonifacio Gas Corp., among others.

The JICA study is expected to re-evaluate opportunities in the natural gas industry and identify which infrastructure will be deemed priority projects, and what kind of investments will be needed.

The report will contain an evaluation of the viability of importing natural gas and the potential sources, as well as a validation of the supply and demand statistics, as this would spell out the viability of the natural gas program.

The turnover of the JICA study will allow the DoE to review the report and come up with the  terms of reference for the public bidding of the Batangas-Manila (BatMan 1) natural gas pipeline project by the third quarter of next year.

Based on the initial report submitted earlier by JICA, the proposed $1.3-billion Batangas-Manila natural gas pipeline project is feasible for the government and private companies to pursue.

Energy Undersecretary Jose M. Layug Jr. earlier disclosed that the project’s feasibility was based on certain assumptions on supply and demand which, he cautioned, would have to be reviewed carefully. Based on the projected demand, the BatMan 1 project will need an anchor load of 600 MW, he added.

“They have a projected supply and demand. As an example, they have projections on supply based on the Malampaya reserves. So we advised them to talk with (the consortium operating the) Malampaya gas field off Palawan to ensure that their basis and view of the reserves are aligned with that of the consortium,” Layug said.

Layug noted, however, that the preliminary report involved the feasibility only of the 100-kilometer pipeline. JICA has yet to present its findings regarding the needed LNG receiving terminal, a power plant that would provide the so-called anchor load for the pipeline and other related infrastructure.

Energy Secretary Jose Rene D. Almendras earlier stressed the need to pursue alternative fuels such as natural gas given the global oil price volatility, to which the Philippines is highly vulnerable as it sources most of its fuel requirements abroad.

Natural gas has been deemed to be among the more feasible alternatives that will allow the country to diversify its energy and transport fuel sources.