Samsung shows interest in LNG industry

MANILA, Philippines - Samsung, one of Korea’s biggest conglomerates, has expressed interested in participating in the country’s liquefied natural gas (LNG) industry, according to the energy department.

Department of Energy director Jesus Tamang said Samsung has informed them of its interest in developing LNG power facilities and the construction of the Batangas-Manila natural gas pipeline project.

 “Samsung indicated interest in the engineering, procurement and construction (EPC) of the LNG plants and gas pipeline,” Tamang said.

Samsung is one of the world’s renowned supplier of floating LNG vessels. Samsung’s Heavy Industries unit developed the LNG-FPSO (floating, production, storage and offloading vessel), the first ship of its kind in the world, an innovative ship that enables the production, liquefaction and storage of LNG.

 In 2009, the Royal Dutch Shell Group selected Samsung Heavy Industries to be its exclusive supplier of LNG-FPSO for the next 15 years for a contract price of $50 billion.

Energy Undersecretary Jay Layug earlier said the department received numerous proposals from local and foreign firms to put up LNG infrastructure in the country, including the construction of LNG terminals, gas pipeline, or LNG-fired power plants.

Among the interested investors were: First Pacific Capital (Australia); ENN Energy Holdings (China); Synergy International (HK); SKE & C (Korea); Korean Western Power (Korea); BW Ventures; Hyundai Merchant Marine (Korea); Energy World (Australia); Philippine National Oil Co., GN Power Corp., First Gen Corp.; and Abacus Consolidated Resources/ENI-Saipem (Italian).

“We are completing our master plan for natural gas through technical assistance by JICA (Japan International Cooperation Agency) and World Bank by yearend. After we complete plan and results are favorable, then we conduct public bidding such infrastructures next year,” Layug added.

The World Bank and other multilateral financial institutions are looking at funding the construction of LNG facilities.

The energy department is also hoping that JICA, the agency conducting technical studies of the natural gas industry, will be able to complete its report by September.

The World Bank is conducting a separate technical study on the feasibility of natural gas projects in Mindanao.

The pipeline and LNG re-gas facilities could be offered under a Public-Private Partnership (PPP) arrangement, but the power component must be held as a purely private sector undertaking in keeping with the provisions of the Electric Power Industry Reform Act (EPIRA).

For the project biddings targeted within the year, the preliminary costs quoted by the energy department had been $1.3 billion for the pipeline and $700 million to $800 million for the re-gas terminal.

The priority would be the auction for the Batangas-Manila gas pipeline, while the first LNG terminal being offered is the one in Batangas to serve the requirements of power facilities, which will retrofit as gas-fed generation units.

Mindanao, primarily Davao, is also eyed as site for the other LNG facility which has been gaining support from the World Bank.