By Myrna M. Velasco
The winning investor-group that shall build the country’s 5.0 million metric tons per annum (mtpa) liquefied natural gas (LNG) import terminal project rests primarily on when that proponent-entity will achieve financial closing.
That is based on the “rules of the investment race” that the Department of Energy (DOE) has been enforcing in the country’s gas industry reset framework.
“It’s really a ‘first come, first served’ basis. So the financial compliance or the financial closing is really much needed in this project,” Energy Undersecretary Donato D. Marcos said.
In the end, he noted that the “permit to construct” for the country’s LNG terminal, primarily for Luzon grid, will just be given to one investing-party.
That is despite the fact that there are 10 investor-groups currently in the roll of the DOE that are eyeing to set up the country’s LNG import facility – either as an onshore terminal or floating storage and regasification unit (FSRU) configuration.
On presumption that many of the interested investors are actually all financially and technically capable to do the project – the likes of First Gen Corporation, Tokyo Gas Co. Ltd., China National Offshore Oil Corporation and Lloyds Energy Group, the energy department insisted that achieving a financial closing shall still be deemed as major indication of seriousness to really pursue the LNG terminal venture.
“The first one who gets the financial closing and all the compliance will definitely get the project,” Marcos has reiterated.
The energy official similarly qualified that the 5.0 million mtpa will be for the Luzon market; while Visayas proponents will have to submit and apprise the DOE of calculations on what shall be the tangible gas needs of that particular grid.
Of the proposed capacity of the LNG terminal, the department indicated that 3.4 million mtpa will be enough to feed the existing gas-fired plants of the country; while 1.6 million mtpa shall be allotted for capacity expansion.
Just this week in Tokyo at the Philippines-Japan High Level Committee on Infrastructure and Economic Cooperation, Energy Secretary Alfonso G. Cusi has intensified his pitch for LNG investments in the Philippines.
The energy chief noted that he will focus on “encouraging natural gas companies in Japan to invest in the Philippines LNG hub terminal project in anticipation of the Malampaya gas field’s depletion by 2022.”
Tokyo Gas had been among the Japanese firms that submitted its letter of intent (LOI) to the DOE since last year – on planned investment in LNG infrastructure in the country. From that time on, the Japanese company had advanced its interest and joined the bidding on Philippine National Oil Company’s search for a strategic partner on its LNG terminal project.
In Cusi’s assessment, “the strategic location of the Philippines, as well as the fair and competitive playing field policy for natural gas would entice investors to engage in the LNG terminal project.”