PNOC to secure significant stake in LNG facility
Danessa Rivera (The Philippine Star) - July 8, 2019 - 12:00am

MANILA, Philippines — State-run Philippine National Oil Co. (PNOC) is looking to secure a significant stake in the 1,200-megawatt (MW) liquefied natural gas (LNG) merchant power plant that Dubai-based Lloyds Energy is planning to build in the country, the energy chief said.

Energy Secretary Alfonso Cusi said PNOC and Lloyds are in discussions on the ownership of the LNG power facility being planned.

He said Lloyds Energy and Japan’s Mitsubishi Group will put up a 1,200-MW LNG power plant in the country.

“What PNOC would like to have is to get a board seat so at least we have proper representation and (see) how things are running,” Cusi said.

Both parties are also negotiating on where to put up the power plant in state-owned properties in Limay, Bataan, Bauan, Batangas, and Mabini, Batangas, the government official said.

“That is part of the discussion that’s why PNOC is part of the negotiations,” Cusi said.

Last month, PNOC signed a memorandum of understanding with Lloyds Energy to “explore cooperative ways for the development of LNG facilities and natural gas generation plants and other related activities.”

Apart from negotiations with PNOC, Lloyds Energy is also working on its application for permits with the Department of Energy.

“They’re working on their papers. They’re going to submit it to us,” Cusi said.

“Lloyds Energy is set to submit their masterplan and their timeline and then the schedule of work so we can issue permits if they will meet the terms and conditions,” he added.

The Energy chief said Lloyds Energy’s proposal for an LNG merchant power plant is a product of negotiations when government officials went to Japan during the trip of the President last May.

In previous visits of President Duterte to Japan, Cusi invited Japanese investors to put up merchant power plants in the.

A merchant plant has no bilateral contracts and sells its output to the wholesale electricity spot market (WESM).

 “The government is…encouraging or inviting investment to address the energy requirement of the country in the immediate future,” Cusi said.

Earlier, PNOC president and CEO Reuben Lista said the team-up with Lloyds Energy will not affect its prospective partnership with Phoenix Petroleum Philippines Inc. and China National Offshore Oil Corp. (CNOOC) since both are still exploratory.

Last March, PNOC signed a separate MOU with Phoenix Petroleum and CNOOC Gas and Power Group Co. Ltd. to explore and discuss business opportunities and cooperation in relation to the equity investment in Tanglawan Philippine LNG Inc.

The MOU will also allow PNOC to provide a strategic alliance in further developing the Tanglawan LNG project, with the government-run corporation’s involvement in the areas of pipeline infrastructure and franchise, banked gas, equity, and other marketing opportunities.

Tanglawan Philippine LNG was granted a notice to proceed (NTP) by the Department of Energy (DOE) in December last year to build the LNG hub project with a capacity of 2.2 metric tons per annum (mtpa), which is targeted to start commercial operations by 2023.

Tanglawan is now seeking an extension for its NTP after it expired last June 22.

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