PNOC firms up LNG proj with GNPower

The Philippine National Oil Co. (PNOC) is firming up its liquefied natural gas (LNG) terminal project with GNPower Ltd. Co., a top company official said.

PNOC president Thelmo Cunanan said the country still needs more onshore and offshore development for the LNG industry.

"There are ongoing talks on constructing LNG-receiving terminal. PNOC has discussions with GN-Power. There are projects we want to pursue on this regard. The country needs security of supply once the country starts importing LNG," he said.

He said preliminary talks with GNPower are focused on how to source LNG in the region. "We need to identify the source before we can construct an LNG terminal," he said.

Cunanan said PNOC was eyeing Indonesia as one of the potential sources of LNG for the Philippines.

Earlier, Cunanan revealed that PNOC was also in talks with some Japanese firms for the development of an LNG facility in the country.

"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.

Cunanan also pointed out that PNOC should be able to firm up the gas reserve data to justify the putting up of the LNG terminal.

Early this year, four foreign firms have expressed interest in the supply of LNG to the Philippines. These firms are Qatar Gas, Petronas, British Power and Unocal.

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

PNOC-Exploration Corp. (EC), one of PNOC’s subsidiaries, signed last September a memorandum of understanding (MOU) with BP Asia Pacific Pte. Ltd. (BP) and GNPower for the development of another critical leg of the country’s onshore natural gas transmission pipeline project, including 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.

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

The third phase will cover the installation of an offshore pipeline from the LNG import terminal in Mariveles to the industrial areas in Cavite as well as connect to PNOC’s pipeline under development there.

BP and GNPower 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.