Given lackluster appetite of private investors, state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) is taking the risk of putting up the country’s first liquefied natural gas (LNG) facility.

According to the Department of Energy (D0E), the proposed LNG facility will be a complete chain of delivery, storage and distribution networks.

"In the absence of private investors, the government may take the lead investing role through the PNOC to spur project commencement," Energy undersecretary Mariano S. Salazar said.

There have been previous indications of investment commitments, but the government has not provided explanation or updates on what happened to such project proposals from private groups.

In fact, PNOC first explored the idea of putting up a $ 1.0 billion LNG terminal through a feasibility study undertaken with Japanese firm Marubeni Corporation. The desired outcome then was for them to forge a joint venture for the project’s advancement.

While the envisaged LNG infrastructure has yet to take off from the drawing board, the DoE cannot also keep itself from taking on "big dreams," such as having the country’s gas infrastructure finally connected to neighboring countries via the proposed Trans-Asean Gas Pipeline (TGAP).

The energy official said this pipeline interconnection will enable the country to eventually source its gas supply from more gas resource-rich ASEAN neighbors.

"In partnership with our ASEAN neighbors, we envision accessing natural gas through the TAGP," Salazar has sounded off.

The energy department emphasized that both the pipelines and LNG facility will thrive as critical component in establishing the country’s strategic network of gas infrastructure.

Primarily in the aim to widen natural gas market to other sectors, such as transport, commercial and industrial end-users, it was noted that without the infrastructure, :natural gas development will remain in a stalemate."

To provide an anchor load to the proposed integrated natural gas development project, the government is similarly exploring the fuel conversion into natural gas of some oil-fired power plants, such as the Sucat, Limay and Bataan thermal power facilities.

The LNG storage facility is expected to come on stream by 2010 to 2011, and the project is being lined up to supplement the country’s natural gas requirements in the future.

At present, the domestic market" biggest source of natural gas supply is the $ 4.5 billion Malampaya deep water gas-to-power project, which is estimated to yield proven reserves of up to 4.0 trillion cubic feet.

 

Source : By MYRNA M. VELASCO

http://www.mb.com.ph/