PNOC in talks with Japanese firms for Bataan LNG facility

The Philippine National Oil Co. (PNOC) is in talks with several Japanese firms for the development of a liquefied natural gas (LNG) facility in the country, PNOC president Thelmo Cunanan said.

"An LNG terminal is a must for the downstream natural gas sector. Bataan is an ideal site. We have ongoing talks with Japanese companies to conduct studies on LNG," Cunanan said.

But he pointed out that PNOC should first firm up the gas reserve data to justify the establishment of the LNG terminal.

Cunanan added that they also have joint steering committee with Pertamina, Indonesia’s largest state-run oil and gas firm, for the development of LNG in the country.

At least four foreign firms have earlier expressed interest to supply LNG to the Philippines. These are Qatar Gas, Petronas, British Petroleum and (BP) and Unocal.

A subsidiary, the PNOC-Exploration Corp. (EC) recently signed a memorandum of understanding (MOU) with BP Asia Pacific Pte. Ltd. and GNPower Ltd. Co. (GNP) for the development of another critical leg of the country’s onshore natural gas transmission pipeline project which also includes an LNG terminal in Bataan.

EC president Rufino Bomasang said based on the MOU, EC will take the lead in developing, financing, designing, constructing, owning and operating the pipeline.

GNPower, on the other hand, will develop, finance, design, construct, own and operate the LNG Import Terminal as part of an integrated energy complex in Mariveles, Bataan.

Based on a phased and integrated approach, the pipeline project will be divided and pursued in three phases. The first phase will involve the construction of a pipeline from the LNG import terminal in Mariveles to an existing power plant in Limay also in Bataan.

The second phase will extend the pipeline to the fast-growing economic zones in Subic, Zambales and Clark, Pampanga.

The third phase will encompass the installation of an offshore pipeline from the LNG Import Terminal in Mariveles to the industrial areas in Cavite which will connect to PNOC’s pipeline under development.

BP and GNP will secure the necessary contractual arrangements for the supply of LNG to the Philippines from the Tangguh gas field in Indonesia and sell the gas from the LNG import terminal to third-party consumers in Luzon. Indonesia was chosen as the LNG source for the Philippines as it won the international competitive fuel supply tender conducted by GNPower.

The proposed LNG import terminal is located about 15 kilometers from the Napocor-owned Limay power plant. The pipeline from the terminal could be easily extended to serve customers in the Pampanga area, particularly the Subic-Clark development corridor, and Cavite.