Another notice-to-proceed (NTP) permit was granted by the Department of Energy (DOE) for the installation of an offshore liquefied natural gas (LNG) import facility for a total of six ventures approved so far.
Approved is Vires Energy Corporation, which was acquired last year of Filipino listed firm A. Brown Company Inc. from Singaporean firm Argo Group Pte. Ltd.
According to the energy department, the targeted LNG import facility will also deploy floating storage regasification unit (FSRU) to be sited in Batangas, where most of the country’s existing gas-fired power fleet are installed.
For the anchor market of the proposed gas import terminal, the DOE specified that the project proponent firm will be setting up a 500-megawatt power generating plant proximate to it.
With the NTP issuance, the energy department reiterated that the sponsor firm is given the authority “to secure all necessary permits and clearances” – including those from relevant national government agencies and local government units (LGUs), which is valid for six months and could be renewed for another six months.
As specified by the DOE, the LNG project of Vires Energy will have 162,400 m3 of storage capacity and it will be installed along Barangay Simlong in Batangas City – straddling the south-eastern coastline of Batangas Bay.
“The FSRU is a converted LNG tanker “BW Paris”, built in 2009 with a regasification capacity of up to 3.0 mtpa (metric tons per annum),” the department said. The facility’s commercial operation date is targeted by January 2023.
The DOE further noted that “the project will utilize a land area classified as a heavy industrial zone for back-up fuel supply of diesel fuel during gas outage events.”
Before an investor in LNG import facility could advance to construction phase, it will need to submit documents that will show proof of financial closing; and that will correspondingly serve as DOE’s basis in extending the subsequent license allowing it to go ahead with the facility’s construction.
Vires Energy previously stated that it already secured the requisite environmental compliance certificate (ECC) from the Department of Environment and Natural Resources (DENR) for the project; and the venture has likewise been registered with the Board of Investments (BOI) for the availment of incentives.
Energy Secretary Alfonso G. Cusi stated that “the proposed integrated natural gas-fired power plant and LNG storage and regasification terminal of Vires Energy Corporation will boost the attainment of our vision to develop the Philippines as LNG hub in the Southeast Asian region.”
Fundamentally, the DOE is casting the development of LNG import facilities in the country as a ‘free for all enterprise’ – given the six permits already granted; with not much certainty though if all investors are really serious in advancing their proposed projects to commercial fruition.
The country’s business model leaning on LNG importation is hinged on widely anticipated depletion of gas production from the Malampaya field and the expiration of its service contract in 2024.