With the service contract of the Malampaya gas field expiring in four years, Energy Secretary Alfonso G. Cusi sounded off that the next best option for the country is to take the course of liquefied natural gas (LNG) importation.

In his keynote message at the 9th LNG Producer-Consumer Conference hosted by the Japanese government, the energy chief said “while LNG industry in our country is still in its infancy stage, importation of LNG remains the best option for the Philippines at the moment to assure that the country’s future energy requirements will be sufficiently met.”

Cusi indicated while there are assumptions that Malampaya may still be able to yield additional gas until year 2027 -- if its service contract will be extended -- this would still not be enough to feed on the country’s gas requirements over the long term.

“They say that the Malampaya supply can go as far as 2027 but it does not have enough gas for the further expansion needed to provide future natural gas requirements,” the energy chief opined.

He added the Philippines will need increased gas volumes in the future, with targets of expanded applications in the industrial, commercial, residential and transport sectors.

The Department of Energy (DOE) is hinging the country’s gas future on the proposed investments of at least four LNG import facilities that had already been given initial approvals on their permitting processes.

Of the proponent-firms, it is the joint venture of FGEN LNG Corporation of Lopez-owned First Gen and Tokyo Gas Co. Ltd. that already secured more advance permit to proceed to construction phase – starting with a floating storage regasification unit (FSRU) but will eventually be transformed into a more permanent onshore LNG import facility.

“Our main island of Luzon where the country’s capital is, will initially require 3.5 mtpa of LNG for our existing 3,200 megawatts of gas-fired power plants,” Cusi said.

Beyond that, the energy chief reckoned that gas usage expansion is anticipated as greenfield power projects are being cast on blueprints; and there are also prospects for gas technology applications in the industrial and transport sectors.

Still, the energy secretary admitted that the country may be hurdled with challenges including concerns on pricing, when it paces through a transition that will increase the share of gas on its energy mix.

“Importing LNG requires capital intensive investment in large scale terminals with regasification facilities. This may initially push the challenge due to the limited market of LNG in the country at this time,” Cusi emphasized. At this stage though, he noted that the First Gen-Tokyo Gas project could be the development that will “signal the doning of a vibrant LNG industry in our country.”