Malampaya banked gas gets 2 bids

MANILA, Philippines — State-run Philippine National Oil Co. (PNOC) has received two bids for banked gas with the hope of awarding the contract within the year.

“We confirm that one of the companies is foreign-owned. We note that another company has declared its interest via news publication,” said PNOC chief of staff  Jannefer Pelayo.

The state-run firm is eyeing to unload its unused Malampaya gas called banked gas within the year, Pelayo said.

“We expect more bidders in the coming days before the deadline date of July 23, 2018,” Pelayo said.

Last month, PNOC published a notice inviting interested parties to submit offers to buy its banked gas amounting to 97.67 petajoules.

This is to allow the state-run company to sell it to other interested parties.

Bidders are invited to submit their proposals, which should contain price offer in US dollar per gigajoule exclusive of taxes, volume in petajoules, schedule of withdrawal and description of intended use.

The banked gas—which was paid by government for future use—is stored in the reservoir of the Malampaya deepwater gas-to-power project offshore Palawan owned by PNOC.

Originally, it was designated for the future requirements of the 1,200-megawatt (MW) Ilijan power plant and the five First Gen power plants with existing gas sales and purchase agreements (GSPAs), when the Malampaya service contract ends in 2024.

However, the government decided to sell the banked gas to power generation companies to augment power supply and avoid electricity shortage.

The banked gas, valued at $650 million, is being eyed as forward equity in the government’s plan to develop a liquefied natural gas (LNG) hub.

Energy Secretary Cusi wants to put up an integrated LNG hub with storage, liquefaction, regassification and distribution facility, as well as a reserve initial power plant capacity of 200 MW.

Targeted to be completed in 2020, the project is being eyed to help meet the requirements of gas-fired power plants supplied by Malampaya and make the country an LNG hub in Asia.

PNOC is one of the companies that submitted letters of intent (LOI) to the Department of Energy (DOE) to develop a $2 billion LNG terminal.

The state-run firm has tapped the Asian Development Bank (ADB) as consultant to find a partner and to pursue the LNG hub development.

“The DOE is looking to start constructing the country’s LNG hub by mid-2019 to safeguard against the anticipated contract expiration of the Malampaya gas facility.

The facility is also targeted to become an LNG hub for Asia, complementing those in Japan and Singapore.