DoE asks Tanglawan to bankroll LNG project in 6 months

The Energy Department on Wednesday asked Tanglawan Philippine LNG Inc. to comply with the conditions of the notice to proceed with its $2-billion liquefied natural gas project within six months.

“There is a provision [in the NTP] that there are still papers still to be submitted.  One of the big milestones there is their seriousness to put up a 1,100-megawatt power plant of gas,” Energy Undersecretary Donato Marcos said.

Tanglawan, a joint venture of Phoenix Petroleum and China National Offshore Oil Corp., secured the NTP to build an LNG terminal in Batangas costing $686 million for the regasification terminal and a power plant worth $1.3 billion.

Tanglawan plans to break ground this year for the LNG regasification and receiving terminal with a capacity of 2.2 metric tons per annum.  Commercial operations are expected to start by 2023.

“They have to do all submissions already.  They have six months. The ball is in their hands,” Energy Secretary Alfonso Cusi said.

Requirements for the next six months include permits from other government agencies, environmental compliance certificate,  LGU endorsement,  financial closing and others.

Marcos said Tanglawan would also need to look for an offtaker of its power plant.

“They have to coordinate [with Manila Electric Co.]. Otherwise, the market or the commercial viability of the project will not push through,” he said.

Marcos said Tanglawan would have the option to sell LNG to commercial and industrial establishments and later to household and transport sectors.

“We always issue third party access permit…If some party will need it, you should sell to them also,” he said.

Meanwhile, Marcos said the applications of Excelerate Energy L.P., a US-based LNG company and FGen LNG Corp. (FGEN LNG), a wholly-owned subsidiary of Lopez-led First Gen Corp., were still pending with DoE for evaluation.

He said the two applicants might be given an NTP “if the market that they will declare is not an overlap to the market of the other one.”

“We have not finished the evaluation, but Tanglawan did not say that their captive market is First Gen,” Marcos said.

Cusi said state-run Philippine National Oil Co. planned to team up with Tanglawan for the LNG project.

“They’re working to partner with CNOOC, Tanglawan which at the board, we are saying yes.  Let’s go there so we’ll still protect the interest of the Republic, of the people, of the consumers, of the country if there is a representation in the board,” he said. 

Cusi earlier said PNOC would have an advantage because it has the franchise to operate the pipelines and the department “might elect” to give PNOC a stake in the LNG terminal project.


Topics: Department of Energy , DoE , Tanglawan Philippine LNG Inc. , liquefied natural gas
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