The Department of Energy (DOE) disclosed that it already approved the permit-to-construct application of Atlantic Gulf & Pacific Company (AG&P), and the agency is eyeing that this will be the first liquefied natural gas (LNG) import facility that will reach commercial operations by second quarter of 2022.

Energy Undersecretary Donato D. Marcos said the LNG import terminal project of AG&P, which is also utilizing floating storage and regasification unit (FSRU) technology, has been the second project granted with PCERM or permit to construct, expand, rehabilitate and modify -- that serves as the second layer of permitting for LNG projects in the country.

The first permit to be secured by LNG project proponents from the DOE is the notice-to-proceed (NTP), which is good for six months; and can be extended for another six months. AG&P’s NTP was issued on February 24, 2021.

Under the NTP permitting phase, the LNG facility proponent will have to secure all project approvals it will be needing from various government agencies; and it shall also work on its financial closing as well as off-taker (buyer) of its gas commodity.

If all of those requirements are fully complied with, the LNG project proponent will have to go back to the DOE and apply for PCERM – and upon securing the agency’s go-signal, construction of the gas import facility can already commence.

According to the energy department, the initial phase of AG&P’s LNG project will be FSRU; but its longer-term project blueprint calls for the establishment of a more permanent onshore LNG terminal.

The targeted market of the LNG import facility will be the gas-fired power plant developments of SMC Global Power Holdings Corporation, although it was noted by DOE sources that no definitive power supply contracts had been reported or conveyed yet to the agency.

AG&P has its main corporate office base in Manila; but its ownership is of various international firms that include Asiya Investments of Kuwait; Osaka Gas; and Japan Bank for International Cooperation.

The company has planned its LNG investment in the country for several years already, but it is finally concretizing that venture into commercial fruition because of the ongoing race among project developers for an asset that will replace the gas output of the Malampaya field.

The Philippines currently has over 3,200 megawatts of gas-fired power fleets; and there are also targeted expansions in gas capacities that need to be catered to by LNG that will be imported into the country starting next year.

Another race being targeted by LNG import facilities would be prospective expansion of gas market in the industrial sector, as well as provision of electricity supply in off-grid areas.