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Govt receives offers from four companies to construct LNG facility

The Energy Department said it received letters of interest from four companies to develop an integrated liquefied natural gas facility in the country.

Energy Assistant Secretary Leonido Pulido identified the four firms as Cleanway-Filipino and Resiro, a UK company; Tokyo Gas of Japan; local power producer First Gen Corp.; and  China  National Offshore Oil Corp.

“There are already four companies. They have not submitted their formal petition or application but there have been four preliminary conferences,” Pulido said.

The four firms already submitted letters of interests and request for preliminary conference.

“They submitted for the construction, establishment of the LNG integrated facility but excluding pipeline. Facility will be storage and regas,” the energy official said.

The interested firms will then submit a formal application after the preliminary conferences, the process of which forms part of the Philippine Downstream Natural Gas Rules.

“We are all concerned about what to do for our power plants which rely on Malampaya gas that will be exhausted soon. In order to assure that there will be supply, the solution was to come up with PDNGR,” he said.

Energy Secretary Alfonso Cusi signed last year Department Circular No. 2017-11-0012 which establishes the regulations “with respect to siting, design, construction, expansion, rehabilitation, modification, operation and maintenance of the  natural gas industry.”

The circular ensures compliance to policies on imported LNG from the loading to the LNG terminal, transmission and distribution system.

“Essentially, it allows rules that would determine who among several stakeholders can have the authority to put up the LNG integrated facility. Under this, our government corporations will just be one of several competitors so we can get a more efficient and good system,” Pulido said.

Pulido said the department’s process was expected to be faster than the ongoing unsolicited proposal process of state-run Philippine National Oil Co. Of the four firms that submitted proposals to the department, First Gen and CNOOC also submitted unsolicited proposals to PNOC.

Pulido said the department was still looking at the groundbreaking of the country’s first integrated LNG facility by mid 2018.

“In a free market forces world, everyone can offer but under PDNGR there should be commercial viability. Whenever you start an industry, the government has to come in and protect that industry. Otherwise, if you don’t protect that industry, participants might end up killing each other commercially,” he said.

Topics: liquefied natural gas
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