Power distributor Manila Electric Co. is in talks with Osaka Gas of Japan for a $2-billion integrated natural gas facility in Luzon, its chairman said Thursday.
Meralco chairman Manuel Pangilinan told reporters Osaka Gas, a leading liquefied natural gas supplier in Japan, wanted to build a natural gas power plant in the Philippines.
“They [Osaka Gas] want to build a gas [power] plant in the Philippines, [with] around 1,200 to 1,500 MW with Meralco,” Pangilinan said.
“They are keen to look at it. They are keen to invest in the Philippines,” Pangilinan said.
He said the natural gas plant “might be done in phases, but it is up to 1,500 MW.”
Pangilinan said the planned power project would likely include a regasification facility or terminal for imported LNG.
The regasification facility will convert the imported LNG to natural gas for delivery to the power plant.
“We have to build a regas [facility]. There is no more gas for that size of plant from Malampaya, so you have to import gas in LNG form,” Pangilinan said.
He said the capital cost for an LNG plant “is not that much expensive than coal.”
“The capex [capital expenditure] is actually lower than a coal plant per megawatt, but the problem is the higher cost of power,” he said.
Pangilinan said Meralco would likely take a majority stake of 60 percent while Osaka Gas would have a 40-percent interest in the project.
“To the extent that there is a land, it’s going to be 60:40,” he said.
Pangilinan said he expected the project to materialize in the next three to five years, although the two companies had yet to inspect the proposed site.
Osaka Gas is a key player in Japan’s LNG market and imports about 7.9 million tons per year, representing 9 percent of Japan’s total LNG imports, mostly from the Middle East (Qatar and Oman), Southeast Asia (Malaysia, Indonesia, and Brunei), Australia and Russia.
The Japanese company has stakes in six LNG carriers. Osaka Gas also operates two world-class LNG receiving terminals, including the Himeji and the Senboku terminal.