Shell to supply LNG to planned Meralco PowerGen plant

Shell companies in the Philippines (SciP) will supply Meralco PowerGen Corp.'s planned 1,200-megawatt natural gas-fired power plant with liquefied natural gas, after the two companies signed a memorandum of understanding on Thursday that Meralco Powergen will assess the viability of constructing the plant. Shell’s proposed LNG regasification terminal will be situated in Batangas, as will Meralco’s planned gas-powered plant. “This agreement opens the door for greater use of cleaner energy and enhanced energy security for the Philippines. We are very excited to work with Meralco PowerGen on this project,” said Shell country chairman Edgar Chua. In a statement, Meralco PowerGen executive vice-president and general manager Aaron Domingo said that the purpose of an LNG-based combined cycle power plant is fuel diversification, “as well as address the mid-merit capacity needs of the Luzon grid.” “This collaboration with SCiP helps pave the way for facilities that ensure a reliable and competitively-priced power supply," he said. Domingo did not identify possible joint venture partners for the Batangas plant. However, Meralco PowerGen is conducting a separate feasibility study for partnering with Japan’s Chubu Electric Power, Inc. for an LNG power plant in Quezon. LNG is natural gas converted into a liquid state for storage and transportation, and then regasified upon reaching its destination. The gas can then be distributed through pipelines. In June, Shell signed a separate Memorandum of Agreement with the Department of Energy for a feasibility study on building a LNG regasification terminal next to its refinery in Batangas at an estimated cost of $1 billion. The study is expected to be completed next year, with a “first gas” target date in 2016. Both the proposed plant and the LNG plant will be near Shell's Tabangao Refinery Plant. This site is situated along the government's proposed 100-kilometer Batangas-Manila (“Bat-Man”) pipeline, for which the government is currently preparing the terms of reference for the bidding. Both Shell and Meralco have separately expressed interested in bidding for the pipeline. The parties said the combination of the power plant, the regasification terminal and the pipeline will spur the growth of the country’s natural gas industry. — BM, GMA News