Phoenix Petroleum Philippines plans to formalize a joint venture agreement with CNOOC Gas and Power Group Co. Ltd., a subsidiary of China National Offshore Oil Corp. for an integrated liquefied natural gas project this year.
Phoenix signed a memorandum of understanding with CNOOC Gas for the construction of a new integrated LNG import and regasification terminal in Batangas in April 2018.
Phoenix said a prospectus submitted to the stock exchange that a formal joint venture agreement was “expected to be entered into between the parties during the second half of 2019.”
CNOOC is the largest offshore oil and gas company in China and one of the largest independent oil and gas exploration and production companies in the world.
“Discussions [are] still ongoing with CNOOC. In parallel, we are exploring other routes to market LNG leveraging on our existing capabilities as a trading/marketing company. We continue to engage various stakeholders for the project for potential commercial partnerships,” Phoenix senior vice president Raymond Zorrilla said.
Phoenix said the company planned to own a 40-percent stake in Tanglawan Philippine LNG Inc. with the remaining 60 percent of shares in Tanglawan to be held by CNOOC Gas.
Phoenix, on the other hand, will own 60 percent of shares in Liwanag Philippine Property Management Inc. with the remaining 40 percent of shares to be held by CNOOC Gas.
Both Tanglawan and Liwanag are special purpose vehicles. Tanglawan will be responsible for the construction, operation and maintenance of the LNG facilitywhile Liwanag will be responsible for the land and other permit requirements related to the LNG project.
Tanglawan secured a notice to proceed from the Department of Energy on Dec. 21, 2018 which stipulated that the LNG project would be located on a plot of land in Bauan, Batangas.
“Formal agreements relating to the LNG facility project, such as a project development agreement and both shareholder agreements for Tanglawan and Liwanag are still ongoing,” Phoenix said.
Phoenix said it would pursue the LNG project, cognizant of the increasing demand for cleaner and more secure energy alternatives.
“The company believes that LNG will serve as a critical energy source for the future as the Philippines transitions from conventional fuels to renewables in an attempt to de-risk its energy dependence on imported energy resources,” it said.