12 foreign firms eye Malampaya banked gas

MANILA, Philippines —  There is strong interest to buy the government’s unused Malampaya natural gas, or the so-called banked gas, as state-run Philippine National Oil Co. (PNOC) received pitches from at least 12 foreign companies, its top official said.

PNOC received around a dozen unsolicited proposals to monetize the banked gas, its president Reuben Lista said on the sidelines of a Senate hearing.

“What we want is to monetize the banked gas so we won’t need to make a loan for our planned liquefied natural gas (LNG) hub. There are around a dozen serious ones for the banked gas,” he said.

This was stated in the document submitted to House Minority Leader and Quezon Rep. Danilo Suarez, where PNOC has outlined its plans for the banked gas.

In PNOC’s first option, it plans to trade the banked gas outside the country, which is an offshoot of a realization that locally selling the banked gas may “pose some difficulty” with existing gas sales and purchase agreements (GSPAs), with the earliest expiring in 2022.

Its second option, meanwhile, is to extract the banked gas and burn then sell it in the form of electricity, which is more viable.

PNOC said it is imperative to extract and fully recover the remaining purchase cost as well as optimize its potential value at the earliest time possible, citing that the Malampaya gas field is expected to be depleted by 2024.

However, Department of Energy (DOE) Secretary Alfonso Cusi said PNOC must present the justification for its banked gas options.

“That has to go through board evaluation. The management are looking at that option that we sell it, or extract, burn it and sell it as electricity,” he said.

Lista also said the company has to justify its plans to monetize the banked gas and the development of the LNG hub with the National Economic and Development Authority (NEDA) and Commission on Audit (COA).

“NEDA will not approve the (LNG) project if we’re going to take a loan. We have the banked gas as our equity, that is the direction we are trying to adapt. We’re going to find a partner willing to monetize the banked gas,” he said.

“On the other hand, COA will ask us how the partner was chosen. I have to justify that. We are answerable to the government and money of the people,” the PNOC official said.

PNOC was tasked to put up an integrated LNG hub with storage, liquefaction, regassification and distribution facility, as well as a reserve initial power plant capacity of 200 MW.