The Energy Department will spearhead the development of the country’s first liquefied natural gas terminal to secure the country’s future power requirements from the fuel after if the Malampaya gas project ends, Energy Secretary Alfonso Cusi said Tuesday.
Cusi told reporters at the sidelines of a Senate hearing the government was looking at LNG to support the operation of the Malampaya gas project in northwest Palawan, if the service contract of the Malampaya consortium was not extended.
“Malampaya (consortium) should initiate the renewal if they want to renew because at the end of the term, it reverts back to the government. What we are doing is preparing for any eventuality…,” Cusi said.
The Malampaya consortium is composed of Shell Philippines Exploration B.V. as operator with a 45 percent stake, Chevron Malampaya LLC with an equal 45 percent share and PNOC Exploration Corp. with 10 percent.
The consortium owns service contract 38 which is set to expire in 2024. The consortium has requested an extension of the contract with the previous government.
Cusi said the department was making preparations to ensure the continuity of operations of the Malampaya facility, which supplies fuel to three natural gas power plants in Batangas with a combined capacity of 2,700 megawatts.
“We will make that LNG farm in Batangas to supply gas-to-power plants. We PNOC (state-owned Philippine National Oil Co.) initiated the study but now there are a lot of interest in the private sector. We are open to that. Whatever is best for the country, that’s the direction we will take,” Cusi said.
He said the department was studying all options, including privatizing the Malampaya facility if the service contract was not renewed.
Cusi earlier said he directed PNOC to study the development of a 200-MW LNG power plant in Batangas that would secure the country’s power reserve needs.
“We’re making a study. I asked PNOC to make a study for a 200-MW LNG that would serve as a buffer stock for government to use in case of shortage of power,” he said.
Cusi reiterated the need for adequate reserves in the wake of the yellow and red alerts experienced by the Luzon power grid from July 26 to August 5.
He said the government might fund the construction of the power plant through PNOC after the Electric Power Industry Reform Act of 2001 prevented National Power Corp. from putting up new stations.
“We are required to have some reserve so we just want to make sure that we have a reserve… We’re looking at Batangas, PNOC has a property in Batangas so we’re using that in our study,” the energy chief said.
Cusi said putting up a 200-MW coal plant would take time compared with an LNG power plant.
“We’re still in the study portion. But I’m not saying the study will take 12-18 months. We’re rushing it. (Construction is) 12 to 18months from the time we finish the study. Hopefully, we finish the study within any time now so we can bring it to the board,” he said.