DOE mulls dev’t of LNG facilities to avert impending power crisis

The government will look at the possibility of pursuing developments of liquefied natural gas (LNG) to avert power crisis in the future, a ranking Department of Energy (DOE) said over the weekend.

Energy Undersecretary Peter Abaya said using LNG in power could be cheaper. "It is cheaper than CNG (compressed natural gas) and petroleum products."

According to Abaya, the development of LNG has been proposed before but not been discussed thoroughly.

"There are technologies for LNG and there are quicker to set up. If you want to look at the shortest way to avert crisis in power is in LNG," he said.

He said there are still a lot of interested investors for LNG facilities. "Last week, we had a meeting with Philippine National Oil Co. (PNOC) and other parties," he said.

Declining to identify the parties interested to put up LNG terminals, he said there are three Asian and one Filipino-American firm that are expressing keen interest to construct LNG facilities in the country, particularly in Bataan.

With the bright prospect of LNG, Abaya, however, said the government is temporarily putting in the backburner the construction of Batangas-Manila (Batman I) gas pipeline.

The supplier of natural gas which is SPEX (Shell Philippines Exploration B.V.) has capacity of 3,000 and most of it is already being used in power generation," he said.

He said there is a need to produce more natural gas before the setting up of Batman I is justified.

"Economics will come in if there is a capacity. There is a need for SPEX to invest more to increase the present capacity to justify the gas pipeline. The gas supply should go beyond 3,000 MW, " he said.

The 2,700 MW from SPEX is being used to fire up three natural gas-fired power facilities-Kepco-Ilijan (1,200 MW) and First Gas Corp.’s Sta. Rita (500 MW) and San Lorenzo (1,000 MW).

In 2003, PNOC was exploring talks with GNPower Limited Co. for the construction of LNG terminal in Bataan.

Aside from GN Power, PNOC is also talking with some Japanese firms for the development of LNG facility.

At least four foreign firms had also expressed interest to supply LNG to the Philippines. These are: Qatar Gas, Petronas and BP and Unocal.

The PNOC-Exploration Corp. (EC), one of the subsidiaries of PNOC, signed in September 2004 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.

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.