By Myrna M.Velasco
After changing tack on its quest for a strategic partner, state-run Philippine National Oil Company (PNOC) announced that it will start its tendering process for its downscaled US$600 million liquefied natural gas (LNG) import facility.
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The technology preference this time will also be floating storage regasification unit (FSRU) and its capacity will be initially at 3.0 million tons per annum.
“The pre-qualification tender will be launched by this month, and the selection will be streamlined to ensure that the project will reach commercial operation before the end of the Service Contract for the Malampaya gas exploitation in 2024,” PNOC Senior Vice President for Management Services Glenda G. Martinez has announced.
PNOC President and CEO Reuben S. Lista said the planned project will have room for expansion up to 5.0 mtpa and onshore LNG terminal – and the preferred siting is the company’s property in Batangas.
The company chief executive indicated that seven (7) companies already advanced initial interest, and their expectation shall be up to 40 companies eventually joining the bidding.
The working numbers that PNOC has been anchoring on as far as the scale of investments shall be at US$600 million to US$1.4 billion. The state-run company will be assuming minority stake in the project – as referenced on the joint venture (JV) rules set forth by the National Economic and Development Authority (NEDA), in which the company can assume equity of not more than 50-percent. The tendering process at pre-qualification phase shall last for 30 days and will take another three months for PNOC and its advisors to draw up the shortlist.
Lista noted that based on its discussion with the Department of Energy (DOE), there shall only be one entity that will put up the LNG terminal – so that will either be PNOC-led or a private-driven venture.
According to transaction advisor Asian Development Bank (ADB), it will likely take six months to complete the bid process – or up to the point that selection of PNOC strategic partner shall be consummated. Former National Power Corporation President Guido Alfredo A. Delgado has been engaged by the ADB as adviser; while the legal qualifications of the bid submissions will be evaluated by the group of lawyer Aris Gulapa and New York-headquartered law firm White & Case.
Additionally, Martinez indicated that a key feature of the LNG project tender will include “the minimum capacity of 3 mtpa to cover existing immediate needs with future increase to 5.0 mtpa.”
She expounded that it will be a phased development “to cope with future market developments.” At present, the country’s demand for gas capacity is for the existing 3,100 megawatts of power capacity that are all sited in Batangas.
Martinez added there shall be “flexibility to allow FSRU in the first place, but eventually the terminal will be land-based as demand increases and to ensure greater security.” It shall likewise be implemented “as a joint venture with PNOC to ensure public oversight of the project development and operation,” Martinez stressed.
She further emphasized that “PNOC will work with and facilitate the discussions with public and private stakeholders to ensure that this project will enable the development of a viable and sustainable natural gas market.”