By Myrna M. Velasco
The Uy-led listed firm Phoenix Petroleum Philippines, Inc. is scheduled to firm up a joint venture (JV) deal with state-run Philippine National Oil Company (PNOC) for the latter’s equity take on the former’s US$2.0-billion integrated liquefied natural gas (LNG) projects.
“The first engagement meeting between the two parties progressed last week,” the Uy-led firm has indicated, adding that on their planned JV, “signing of the memorandum of understanding with PNOC (is due) in the coming weeks.”
Phoenix Petroleum further narrated that “the representatives from Phoenix are now in talks with PNOC in hopes to secure a strategic alliance with the state-owned firm in its LNG hub project.”
In the LNG regasification and power plants’ projects, Phoenix Petroleum has initially cemented a JV arrangement with China National Offshore Oil Corporation (CNOOC) as its foreign technical partner and for the Chinese firm to also funnel significant fraction of the facilities’ financing needs. PNOC’s entry will then form the triumvirate for the planned LNG investments.
Their corporate vehicle for the ventures – comprising of 2.2 mtpa LNG import terminal and 1,100-megawatt to 2,000MW capacity gas-fired power plant – is Tanglawan Philippine LNG, Inc.
Phoenix has not qualified though what level of equity PNOC will be taking in – although, it hinted that the latter’s banked gas will be part of the deal.
“With PNOC on board, Phoenix has proposed their participation and involvement in the areas of pipeline infrastructure and franchise, banked gas, equity and other marketing opportunities,” the oil firm said.
It must be recalled that PNOC in itself has first attempted to pursue its own LNG import terminal facility, but that plan was eventually overridden by the Department of Energy (DOE) – as the agency opted to undertake the selection of investor-group that will pursue the project.
Energy Secretary Alfonso G. Cusi nevertheless considered PNOC to still be in the “investing party equation” – primarily in the selection of Phoenix Petroleum-CNOOC for the planned LNG projects.
PNOC, for some time, has also been dangling its ‘banked gas’ to form part of its equity in any JV for LNG projects.
However, the relevant parties have yet to acknowledge if this is the same arrangement concretized in Phoenix Petroleum’s investment accord with PNOC.
The state-run firm is targeting to fetch US$750 million to US$800 million proceeds from the divestment of its banked gas – courtesy of the unused gas fuel of the 1,200MW Ilijan gas-fired power facility.
In the eventual market expansion of gas in the country’s energy sector, PNOC also has leverage on pipeline infrastructure development because it has a franchise for that kind of venture.