MANILA, Philippines - Trans-Asia Oil and Energy Development Corp. of the Phinma Group is awaiting the government’s policy on energy mix as it considers getting into the liquefied natural gas (LNG) industry.
Trans-Asia president and former Energy Secretary Francisco Viray said developing the LNG market in the Philippines would only happen if the government comes out with an energy mix.
LNG is a big challenge and one way of getting LNG into the market is if the government can come up with an energy mix,” he said.
He said that while Trans-Asia is eyeing to also get into LNG, either alone or with a joint venture partner, the company is still awaiting developments in the sector.
This early, he said, it would be a challenge for prospective players to invest in LNG because of the secondary cap.
“If you look at the secondary cap, it poses increased risks for investors. I don’t want to invest and take a risk on that,” Viray said.
He also said that at present, LNG costs more than coal, which also affects its viability.
“We want to know if its commercially viable. LNG will have an impact on power rates so you would want a generation mix that would encourage LNG,” Viray said.
According to data from the Department of Energy (DOE), as of 2011, the country’s present fuel mix is as follows: oil, 30 percent; coal, 20 percent; geothermal 22 percent; biomass, 12 percent; natural gas eight percent; while the rest goes to wind, solar and hydro sources.
The fuel mix policy will also come amid the entry of LNG players in the country. The DOE has said that a fuel policy mix may be necessary to keep domestic pump prices affordable to consumers because LNG is expensive.
“We are coming up with a fuel mix policy but non-committal, non-firm, because bear in mind that although Shell is pushing for (LNG), there are LNG and gas-fired plants in Thailand which are not running because LNG is expensive,” Energy Secretary Carlos Jericho Petilla said earlier.
LNG is natural gas that has been converted into liquid for ease of storage or transport.
Numerous power players have already expressed interest in developing LNG terminals around the country.
Pilipinas Shell Petroleum Corp., for instance wants to build an LNG regasification terminal beside its refinery in Batangas with an estimated cost of $1 billion.