DOE starts fine-tuning policy on LNG development

The Department of Energy (DOE) on Tuesday held the first public consultation to fine tune the draft Philippine Natural Gas Regulation (PNGR)—the policy framework that will guide the development of the natural gas industry.

The DOE plans to develop the natural gas industry and make the country the liquefied natural gas (LNG) trading and trans-shipment hub in the Asia-Pacific region.

"The DOE is already preparing the necessary policies as we approach the depletion of indigenous natural gas supply from Malampaya by 2024," said Energy Secretary Alfonso Cusi.

“By diversifying our energy mix through LNG, we are ensuring a secure and stable supply of energy. This is a priority,” Cusi said.

The policy framework has the following key considerations:

• A drop in indigenous natural gas supply from Malampaya gas field by 2024

• The potential of LNG to cover the increasing mid-merit to peaking demand of around 18,500 megawatts (MW) by 2040 based on the Philippine Energy Plan (PEP)

• The potential of LNG/natural gas-fired power plants in complementing renewables from 5,000 MW to 15,000 MW by 2035

• The potential of LNG to replace diesel-fired power plants in off-grid areas

• The expected demand for natural gas from the commercial, industrial, transportation, and household sectors

Cusi earlier said the DOE is eyeing to make the Philippines the LNG hub in the region, with an LNG terminal estimated to cost P100 billion and targeted for completion in 2020.

It consists of a gas storage facility with a rated capacity of 5 million tons per year, and a power plant with an initial capacity of 200 MW which could later be expanded to 1,000 MW.

The Energy chief said China, Japan, and Russia are interested in joining the LNG terminal project.
The Philippine National Oil Company would be the main local partner of the DOE, but the department is inviting other interested stakeholders.

Among the 51 local and foreign stakeholders at the consultation on Tuesday morning were the International Finance Corp., Aboitiz Power, Energy Development Corp., GE Philippines Inc., IE Singapore, Japan Bank for International Cooperation, Marubeni Philippines Corp., Metro Pacific Investments, Mitsui & Co. (Asia Pacific Pte. Ltd.), National Power Corp., and Shell Philippines Exploration B.V.  — Ted Cordero/VDS, GMA News