PHL hastening LNG development
By Lenie Lectura – October 15, 2020
from Business Mirror
United States-based New Fortress Energy LLC (NFE) and state firm Philippine National Oil Co. (PNOC) will jointly explore opportunities in the liquefied natural gas (LNG) sector.
They announced Thursday a memorandum of understanding (MOU) signed last October 14, in a virtual ceremony that featured PNOC President and CEO Reuben S. Lista and New Fortress Chairman and CEO Wes Edens. Energy Secretary Alfonso Cusi, who sits as ex-officio Chairman of the Board of PNOC, joined the virtual gathering to witness the signing ceremony.
“We welcome this recent development in light of our intensified efforts to ensure the country’s energy security with the expected depletion of Malampaya, and as part of our initial steps towards attaining our vision of establishing the Philippines as a regional LNG hub in Southeast Asia. We hope that this partnership would bear fruit that would redound to the advantage of our people,” Cusi said.
The Malampaya gas field is expected to be depleted by 2027.
Under the MOU, PNOC and NFE will work together to identify potential opportunities to accelerate the development of LNG and power infrastructure in the country. Their goal is to advance the development of infrastructure to supply reliable, cost-competitive power and natural gas into the Philippine market.
No other details were provided.
State-run PNOC was already in the process of competitive selection for a partner for the LNG Terminal Project when it was shelved in December 2018 in light of increased private sector interest to undertake, on its own, the entire project.
“We are confident that, with this cooperation with New Fortress Energy, PNOC will find meaningful ways to contribute to achieving energy security and stability in the country,” Lista said. “NFE can help us bridge the gaps in the value chain for a robust LNG industry and enable us take that giant leap towards the realization of the Philippines’s potential as a strategic LNG hub for the Asia-Pacific region.”
The MOU is nonbinding on the parties, and actual terms of any future definitive agreement may differ from the terms of the MOU.
“The memorandum signed today will enable cleaner, more affordable and more reliable energy for the people of the Philippines. Increasing access to power across the islands at a rapid pace will create significant growth opportunities. We look forward to working closely with our partners at PNOC and the government to bring more reliable power and help accelerate the clean energy transition,” said Edens.
NFE is a NASDAQ-listed, US-based global energy infrastructure company, founded in 2014. It specializes in the construction and operation of LNG import terminals and other related facilities on natural gas utilization.
The other day, Cusi told the LNG Producer-Consumer Conference 2020 that LNG imports remain the best way to address the country’s future power requirements.
“While the LNG industry is still in its infancy stage, imports of LNG remain the best option for the Philippines at the moment to assure the country’s future energy requirements will be sufficiently met,” said the energy chief.
“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 particularly with the plan to expand application of LNG in the industrial, commercial, residential, and transport sectors.”
Four LNG players secured their permits from the DOE. These are First Gen Corp. with Tokyo Gas Co. Ltd., US-based Excelerate Energy, Energy World Gas Operations Philippines Inc., and Batangas Clean Energy of the Lucio Tan Group.
