PNOC signs exclusive deal with Lloyds Energy on LNG, depot ventures

By Myrna M. Velasco – June 25, 2019, 10:00 PM
from Manila Bulletin

State-run Philippine National Oil Company (PNOC) has signed a non-exclusive memorandum of understanding (MOU) with Dubai-headquartered Lloyds Energy for planned liquefied natural gas (LNG) and oil depot projects.

As PNOC also has existing MOU with Filipino firm Phoenix Petroleum Philippines Inc. on another LNG venture, company president Reuben S. Lista qualified that the state-run firm has not been prevented from targeting other business tie-ups.

“Both are exploratory and without exclusivity clauses and one does not affect the other,” the PNOC chief executive said.

The state-run company first explored partnership with Lloyds Energy when it was scouting last year for its own partner on cast LNG import terminal and gas-fired power projects. It penciled in then capital outlay of US$2.0 billion for these targeted installations.

PNOC’s joint venture-partner search though was cut short latter part of 2018 when the Department of Energy (DOE) enforced that it shall instead be the one issuing permits or notice-to-proceed to LNG project developers that are serious and viable enough to bring their ventures into commercial fruition.

Phoenix Petroleum emerged first in the government’s list to put up proposed LNG terminal in Batangas – to be integrated with a power project of 800 to 1,000 megawatts capacity.

PNOC was later invited by Phoenix Petroleum in a triumvirate with China National Offshore Oil Corporation (CNOOC) to advance the planned LNG import facility and power plant projects – but until this time, it was indicated that negotiations are still ongoing on the propounded equity sharing of the companies involved in the projects.

And on the latest MOU that PNOC signed with Lloyds Energy, Lista said “details are still under wraps” because they are still negotiating terms on proposed project implementations.

“These steps will encourage private sector to consider these directions, just like what we did wit the LNG hub,” Lista stressed.

The PNOC president has not also fleshed out their targeted venture into oil depot, although there had been previous proposals by its subsidiary to import diesel that it can offer to consumers at a cost that will be less than prevailing pump prices in the country.

The PNOC president further noted that they are prompted into widening their search for investment-partners as the country is critically manifesting now its need for power capacity additions.

The PNOC-Phoenix-CNOOC project is for 2.3 million tons per annum capacity of LNG import facility; and together with the power plant, it will require investment of US$2.0 billion.