PNOC to separately sell banked gas in deal with CNOOC-Phoenix tandem

By Myrna M. Velasco

State-run Philippine National Oil Company (PNOC) is targeting to separately sell its banked gas to prospective partners in the three-pronged liquefied natural gas (LNG) projects they have been pursuing.

PNOC President and CEO Reuben S.  Lista. PNOC President and CEO Reuben S. Lista.

PNOC President Reuben S. Lista said the company is not leaning on placing its banked gas as equity in the LNG import terminal that the triumvirate co-venturers will be constructing in Batangas.

The state-run firm is currently in discussions with the joint venture of Phoenix Petroleum Philippines, Inc. and China National Offshore Oil Corporation (CNOOC) on the proposed LNG terminal project.

The other facet of their tie-up arrangement will be the gas-fed power plant currently being blueprinted at 1,100 to 2,000 megawatts in capacity; and the next phases will be gas distribution and pursuing market expansion that may be catered through a gas pipeline.

For the two initial components of the investments, the targeted capital outlay will be US$2.0 billion – and that shall be the basis of the equity sharing of the project sponsors in the targeted LNG facilities.

“The banked gas, while we already discussed it in passing, there’s no agreement yet because it’s them (Phoenix and CNOOC) that will consider it when the LNG power plant is already operational,” Lista said.

He qualified that they have given up on plans of equitizing the banked gas because it had been a dilemma raised by investors when PNOC attempted to search for its own strategic partner on its proposed LNG hub.

“That’s where we encountered problems in the past and investors were not too willing to partner with us, so now we don’t want to confuse or muddle the issue,” he stressed.

At this stage, the point of discussion is still confined to the setting up of the planned 2.2 mtpa LNG import terminal; and being done in parallel is the investment discussion on the proposed gas-fired power plant.

The project sponsors, he added, already talked about prospective minimum and maximum equity participation that PNOC could corner in the project, but he said the actual numbers have yet to be firmed up.

“There are already numbers being mentioned in our negotiations but we have not exactly agreed and we have not signed anything yet,” Lista emphasized.

The targeted LNG terminal and gas-fired power projects are eyed to be reaching commercial commissioning by year 2023 – a year prior to the lapse of the Malampaya field’s 25-year service contract.