Dennis Uy forges partnership with China’s CNOOC for LNG terminal hub

MANILA, Philippines — Davao-based businessman Dennis Uy is partnering with China’s largest offshore oil and gas company for a liquefied natural gas project in the Philippines, which could potentially make Uy the first LNG proponent in the country.

Uy’s Phoenix Petroleum will enter into a memorandum of understanding with China’s CNOOC Gas and Power Group Co. Ltd. to study, plan, and develop an integrated liquified natural gas (LNG) project in the Philippines, the listed company said in a disclosure to the Philippine Stock Exchange (PSE) yesterday.

CNOOC Gas is a subsidiary of China National Offshore Oil Corp. The CNOOC Group is the largest offshore oil and gas company in China and is also one of the largest independent oil and gas exploration and production companies in the world.

“The company’s board of directors has approved and authorized the execution of a non-binding Memorandum of Understanding with CNOOC Gas and Power Group,” Phoenix said.

The planned venture with CNOOC comes just after Phoenix said in April that it is adding LNG to its portfolio, amid the looming depletion of Malampaya gas project.

The oil company is seriously considering LNG in its list of products, Phoenix CFO and incoming head of corporate finance and treasurer Joseph John Ong said in April.

“We’re interested in LNG, but right now there’s no demand for LNG. We need to wait for off-take demand for LNG, maybe after Malampaya runs out. When it runs out, maybe there will be demand for importation,” he said.

 The main business of Phoenix is trading and whatever the market needs, it will sell it, the company official said.

The contract for the Malampaya gas-to-power project offshore Palawan expires in 2024.

However, Shell Philippines Exploration B.V. (SPEX) – the operator of Malampaya with a 45 percent interest—said the project could still provide gas supply beyond the 2024 expiry of its contract, or until 2027 to 2029.

LNG is natural gas that has been converted into liquid for ease of storage or transport.

The government and some of the country’s energy players have stressed the need to have an LNG facility in the country especially with the looming depletion of Malampaya gas.

The Department of Energy, for instance, wants to put up an LNG hub with storage, liquefaction, regassification, and distribution facility, as well as a reserve initial power plant capacity of 200 MW.

CNOOC and other foreign firms have expressed interest in building the government’s planned LNG facility.