DOE: Gas aggregation strategy may help cushion impact of rising LNG prices

The proposed gas aggregation strategy of Razon-led Prime Infrastructure Capital Inc. (Prime Infra) and Lopez-led First Gen Corp. may help soften the impact of rising liquefied natural gas (LNG) prices on consumers, the Department of Energy (DOE) said Wednesday.

On Monday, First Gen said that the gas aggregation framework being discussed with Prime Infra was meant to make it possible to blend currently declining volumes of indigenous Malampaya gas with imported liquefied natural gas.

With this, Energy Secretary Raphael Lotilla said the proposed strategy may help cushion the impact of a surge in LNG prices brought about by the Ukraine-Russia war.

He said that natural gas from the Malampaya gas field can be aggregated with imported LNG to address the war’s impact on the Philippine power sector.

"That’s what we are trying to prevent from happening in terms of spikes in the price of imported LNG, and the plan is to blend the lower price of Malampaya natural gas with the imported LNG so that we can soften the impact or the volatilities of imported LNG," Lotilla said.

"By 2026 or 2025, if we are lucky, there will be more LNG supply coming on stream globally, and therefore the expectation is that prices of LNG will soften as well," he said.

The gas aggregation proposal was already presented to President Ferdinand "Bongbong" Marcos Jr., according to First Gen.

Lotilla said the aggregation strategy complements the extension of the Malampaya service contract for another 15 years.

"The importation of LNG will therefore secure the gas supply for the Ilijan and the First Gas plants in the meantime that we don’t have sufficient natural gas supply from Malampaya," the Energy chief said. — VBL, GMA Integrated News