PNOC still firming up equity take in CNOOC-Uy LNG project

By Myrna M. Velasco – February 18, 2019, 10:00 PM
from Manila Bulletin

State-run Philippine National Oil Company (PNOC) is still in the process of firming up its targeted equity take in the planned $2.0-billion integrated liquefied natural gas (LNG) project of businessman Dennis Uy and China National Offshore Oil Corporation.

PNOC President and CEO Reuben S. Lista.

“We are still in discussions but both parties are positively talking,” PNOC President and CEO Reuben S. Lista said on media queries relating to the looming business partnership.

The government-run firm has not given details on their parameters of negotiations, but Uy’s Phoenix Petroleum indicated last week that the banked gas of PNOC is part of the parties’ discussion agenda.

PNOC said earlier that it would like its banked gas valued in any tie-up deal for LNG ventures – and such will serve as its equity in the corporate vehicle undertaking the project.

The company similarly asserted that it is eyeing a substantial stake in the venture – but not necessarily a majority shareholder.

Uy and CNOOC’s Tanglawan Philippine LNG, Inc. was the first project granted a notice to proceed (NTP) approval by the Department of Energy (DOE) on the country’s gas market reset post-Malampaya phase.

The integrated LNG import terminal and gas-fed power plant venture is targeted for commercial commissioning by year 2023 – a year prior to the lapse of the contract of the Malampaya consortium.

The government concurs to forecasts of possible gas extraction’s life cycle end at the Malampaya gas field, hence, it is lining up LNG importation as an option for the industry.

The country has more than 3,000 megawatts of existing capacity of gas-underpinned electricity generation, thus, it is very crucial that gas supply for the country be sustained for the long term.

For the entire industry, however, gas pricing remains a hurdle and how its seemingly more expensive cost pass-on proposition be eventually accepted by Filipino consumers vis-a-vis lower cost but higher carbon emissions technology alternatives.