UK firm to put up $250-M methanol facility

UK-based Sterling Energy Limited Partnership (Sterling) is planning to invest some $250 million (P12.75 billion) on an offshore methanol plant somewhere in the Reed Bank area in Northwest Palawan. It will be the first of its kind in the world.

During the ceremonial signing of geophysical survey and exploration contract (GSEC) 101 awarded to the European exploration firm, Sterling chairman Richard O’Toole said the proposed plant would have a capacity of approximately 7,000 tons per day (5,000 methanol and 2,000 condensate).

Methanol is a kind of alcohol derivative. It could also be used as a chemical feedstock in place of liquefied petroleum gas (LPG). This is also normally used in campers’ lamp. Based on the proposed methanol plant process, the gas that would be extracted from the drilling area would be converted into liquid. This liquefied by-product could also be used as feedstock for petrochemical plants.

O’Toole said the construction of the plant would take about two years. The company has yet to determine the exact location where the plant will be built.

Sterling managing director Nigel Quinton said the feasibility study will be completed early next year. The contract of Sterling will last up to 18 months and can be extended by another six months. "We have to dig first our wells, so we will know if it warrants the construction of a methanol plant," he said.

Quinton said they are already eyeing several markets in Southeast Asia for their methanol. These include: Japan, Korea, Taiwan, South China, Singapore and possibly in the Philippines.

All these things, Quinton said are in the preliminary stages. "There are a lot of work we have to do. It (methanol plant) is just a concept as of the moment."

The Sterling official said they do not expect any environmental problems. "This is a clean fuel of the future," he said.

The DOE has approved the GSEC 101 application of Sterling to explore gas prospect in the Reed Bank area in Northwest of Palawan. The Reed Bank basin is located southwest of the Philippines in the eastern portion of the South China Sea. It is adjacent to the petroleum-producing Northwest Palawan basin where the Malampaya gas field is located.

Quinton said they will spend about $4 to $5 million for every well drilled. The GSEC 101 will allow Sterling to carry out a geophysical work program and conduct a feasibility study of the Sampaguita gas discovery in the area. The GSEC an area of over one million hectares which is believed to hold large gas reserves as indicated in previous studies conducted by Kirkland/Dragon in the early 90s.