More firms to build LNG terminals

MANILA, Philippines — More interested parties are eyeing to build a liquefied natural gas (LNG) terminal, while Phoenix Petroleum Philippines Inc. of Dennis Uy has withdrawn its application with the Department of Energy.

In a Senate hearing yesterday, DOE assistant secretary Leonido Pulido said three companies have expressed interest in putting up floating storage and regassification unit (FSRU). They  are Vires Energy Corp., Atlantic, Gulf and Pacific Company (AG&P) and Shell Energy Philippines.

An FSRU is a LNG carrier capable of storing LNG and which has an onboard regasification plant capable of returning LNG into a gaseous state and then supplying it directly into the gas network.

“We had a pre-application conference with Vires Energy which plans to bring in FSRU, and with AG&P which has an initial agreement with San Miguel Corp. Another is a subsidiary of Royal Dutch Shell Co., which also intends to bring in FSRU,” Pulido said.

According to the DOE’s Natural Gas Management Division, the three companies have submitted applications for notice to proceed (NTP) for their proposed LNG terminal projects.

The DOE issues an NTP to entities with a target market for LNG supply to prove the commercial viability of the project.

Meanwhile, Pulido said Tanglawan Philippines LNG Inc.—the partnership between  Phoenix Petroleum  and China National Offshore Oil Corp. (CNOOC)—has decided to drop its proposed  LNG project.

“The Tanglawan project, we were constrained to cancel their NTP as they essentially withdrew their plans as they were not able to reach financial close and had a few difficulties regarding their project proposal, so it was essentially withdrawn,” the DOE official said.

In withdrawing their NTP, Tanglawan cited commercial issues in the project.

“I believe it is mostly a commercial issue and it’s really the existing anchor market and the availability of land in the area. According to them and based on our observations, it’s really a commercial issue,” Pulido said.

Tanglawan had  secured a six-month NTP in December 2018. In June 2019, it applied to extend the NTP.

The company was planning to build a regasification and receiving terminal with a capacity of 2.2 metric tons per annum (mtpa), with commercial operations targeted to start by end-2023.

It also aimed to develop a gas-fired power generation facility with up to 2,000 megawatts (MW) installed capacity, initially putting up a 1,100-MW gas-fired power plant to become the offtaker of the LNG supply.

However, in December 2019, Phoenix and CNOOC  separately requested the DOE to suspend its application to extend the NTP for Tanglawan’s integrated LNG Hub project.

This is because of the entry of Udenna Corp., another company owned by  Uy, in the Malampaya deep water-gas-to-power project through the acquisition of Chevron Philippines Ltd.’s 45 percent participating stake.

So far, the DOE issued an NTP to First Gen Corp.’s wholly owned subsidiary FGEN LNG Corp. to construct the FGEN Batangas LNG Terminal project, Texas-based Excelerate Energy’s LNG facility, and Lucio Tan-backed Batangas Clean Energy, which are all located in Batangas.

First Gen’s project with Tokyo Gas in Batangas will have a capacity to process five mpta of LNG and will require investment of around $1 billion. It  hopes to start LNG imports by 2021 through FSRU, and from its onshore facility by 2024.