3 LNG facilities start competing in local market next year

By Myrna M. Velasco – August 13, 2021, 5:34 PM
from Manila Bulletin

At least three liquefied natural gas (LNG) import facilities that are anchored on floating storage and regasification units (FSRUs) will start competing for the Philippine gas market next year.

Already head-to-head in the race are the proposed LNG offshore facilities of First Gen Corporation (FGen), the country’s clean energy leader, and American firm Excelerate Energy. Both firms have been lining up the commercial debut of their facilities by third quarter and second quarter next year, respectively.

Energy Undersecretary Felix William B. Fuentebella this week also revealed that Philippine-headquartered AG&P was targeting commercial operation of its LNG terminal by the second quarter of 2022.

AG&P is an oil and gas company with manufacturing facility in Batangas, but its beneficial owners comprise of both Filipino and foreign companies, including Kuwaiti firm Asiya Investments; Filipino firm A. Soriano Corporation or Anscor via an offshore entity; and American businessman Joseph Sigelman, who is also the company’s chief executive.

According to Fuentebella, the LNG import facility of AG&P will first be underpinned by a floating storage unit (FSU). Its longer term investment strategy is to install an onshore LNG terminal.

The project, he added, will be undertaken in partnership with Japanese firm Osaka Gas, which shall serve as its technical support provider via a technical services agreement (TSAs) that the parties will ink. The facility development, in particular, will require an investment of P15.33 billion or roughly $300 million.

The capacity of the terminal at 3.0 million tons per annum (mtpa) is almost of the same scale as its competitor-project developers – and AG&P is also eyeing to cater to both power plant applications as well as industries as its core markets.

“Target date of commercial operation is by end June 2022 to provide the LNG storage and regasification services for the existing 1,200-megawatt Ilijan power plant in Batangas,” Fuentebella said.

The notice-to-proceed (NTP), or the initial batch of permit for that LNG project, was issued by the Department of Energy (DOE) on February 24 this year – and that will have a six-month validity or until August 23, 2021.

It was qualified by the DOE though that as of the last meeting with AG&P in July, “they (AG&P) may avail of the extension,” and that could be additional six-month leeway before the developer-firm would advance in securing its permit-to-construct, expand, rehabilitate and modify (PCERM), which the sponsor-firm will also need to file with the energy department.

The agency noted it is “currently waiting for AG&P’s final decision, which should be submitted, on or before August 23 this year.”
As specified by the department, “AG&P may avail for another six months extension under the guidelines or they can proceed to the submission of PCERM.”

The emerging LNG industry is the ‘next wave of intense competition’ among the “big boys” of the energy sector, as the commodity is strategically positioned as a replacement to the capacity depletion of the Malampaya gas field.