DOE expects major push in LNG development
By Donnabelle L. Gatdula (The Philippine Star) Updated May 20, 2011 12:00 AM Comments (0)
MANILA, Philippines - The Department of Energy (DOE) said it anticipates a major push in the country’s liquefied natural gas (LNG) development program with the completion of a study by the World Bank (WB) and Japan International Cooperation Agency (JICA).
“The study by JICA and World Bank on the Luzon and Mindanao LNG program will be completed by September,” Energy Secretary Jose Rene Almendras said, after which they expect to release the terms of reference (TOR) for the gas pipeline/LNG projects.
“We may have it out anytime early next year,” the energy chief said.
He said the most crucial part of the study being conducted by the two multilateral financial institutions is the Mindanao component.
According to Almendras, the government wants to conduct the simultaneous development of LNG in Luzon and Mindanao.
He said they want the program to kick off anytime soon as there are already a number of big LNG developers expressing keen interest to participate in the Philippine LNG industry.
For the setting of LNG terminal, he said there are at least four groups that have indicated interest. On the gas pipeline from Batangas to Manila, he said there are at least six prospective bidders.
While he declined to give the identities of the interested parties, Almendras said they are big names in the LNG business from the US, China, Australia, Italy, Japan and Korea.
He said they would also need to fast track LNG development as the country may be competing for investment since Japan is shifting to LNG development from nuclear.
“We hope we could still corner some investments as many LNG developers are eyeing Japan,” he said.
Almendras noted that LNG is one of the fastest to build power generation facilities. In Japan, a facility could be put up in two to three months.
Earlier, International Finance Corp. (IFC), the private sector lending arm of the World Bank, has submitted a proposal for the construction of a 300-megawatt (MW) LNG facility in Mindanao.
In 2002, JICA prepared a master plan for the development of the natural gas industry in the Philippines .
Given the timeline presented in the master plan, the implementation of the proposed infrastructure projects was not realized due to several factors (i.e projects were too investment-intensive, regulatory environment not conducive, gas supply limitations).
The master plan was developed during the period when the Malampaya project was just starting its commercial operation.
The new master plan would involve the determining of an appropriate strategy to implement the identified infrastructure facilities in Luzon, Visayas and Mindanao.
It would also include a conduct of feasibility study on the prioritization of implementing identified facilities all over the country.
The DOE chief also said that the country may depend on LNG-fueled generating facilities to avert a power shortage within the next two years.
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