DOE issues notice-to-proceed on Shell’s LNG import facility project

By Myrna M. Velasco – March 26, 2021, 1:35 PM
from Manila Bulletin

The Department of Energy (DOE) has issued another notice-to-proceed (NTP) for a liquefied natural gas (LNG) import facility project – this time for Shell Energy Philippines.

According to the project proponent-firm, the Philippines “is an important country for Shell and is keen to continue working with the country to meet its growing energy requirements.”

Shell indicated that it will also keep on pursuing “opportunities where it can leverage its global expertise to provide more and cleaner energy solutions.”

No specific data has been given yet on the targeted volume of the proposed LNG import facility, as well as on the proposed scale of investments; completion timeframes and project siting.

Shell is a well-entrenched player in the global gas sector and has always stated that Asia, including the Philippines, will be key markets that it will be looking at for continued investment opportunities.

It has to be noted that the Malampaya gas field in the country is currently operated by Shell Philippines Exploration B.V. (SPEX), although it is now advancing the sale of its 45-percent stake in the project prior to the lapse of the field’s service contract in 2024.

With the planned LNG import facility venture, it is viewed that this will prospectively be a change in business model for Shell – from extracting indigenous gas at the Malampaya field to now bringing LNG into the Philippines from offshore sources.

Gas is seen as the fuel that will feed the “energy transition” pathway of the Philippines – primarily for solutions leaning on cleaner energy technologies, and this could be primarily ushered in by coupling gas with the targeted massive scale renewable energy (RE) installations; plus the institutionalization of energy efficiency and conservation as value-added solutions.

The DOE has been pushing for investments in LNG import facilities in the country, so the gas needs of more than 3,200 megawatts of existing gas-fed electric generating plants could be sustained, especially beyond the well-anticipated expiration of the Malampaya service contract in the immediate term.

Even with additional output that may still be yielded by the country’s only commercial gas field — if its license will be extended, it has been noted that such volume may only last for 6-7 years, hence, LNG importation must still be cast as an option for the domestic energy sector.

Aside from the operating gas-fired power facilities, additional power capacities on that technology sphere are being advanced so the Philippines could shift its energy use to cleaner alternatives.

The grander ambition of the energy department is to position the country as “LNG hub”; although concretizing that goal remains lofty at this point.