Manila Electric Co., through its power generation unit Meralco PowerGen Corp., confirmed talks with First Gen Corp. and the Shell Group of Companies in the Philippines for a possible tie-up in a liquefied natural gas facility are still ongoing
Meralco president Oscar Reyes said his company had not firmed up any plans, but remained in talks with other companies, including First Gen and Shell.
First Gen and Shell are both in advanced stage of their respective LNG terminal projects, which could be the country’s first import facility.
The private sector is rushing the construction of an LNG terminal in preparation for the eventual depletion of the Malampaya natural gas field in northwest Palawan by 2024.
Reyes, meanwhile, said talks with Osaka Gas of Japan for a possible 1,500-megawatt liquefied natural gas integrated facility in Luzon was also ongoing.
Meralco PowerGen officials earlier said the 1,500-MW LNG facility could cost an estimated $2 billion.
Meralco chairman Manuel Pangilinan earlier said the parties were looking at an integrated natural gas facility that included both an LNG terminal and a power plant.
“You need a gassification plant because we need to import gas. There is no more gas from Malampaya for the size of the plant. So there will be a gassification facility and a power plant,” he said.
The regasification facility would convert the imported LNG to natural gas for delivery to the power plant.
Pangilinan said the natural gas plant “might be done in phases, but it is up to 1,500 MW.”
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.”
Pangilinan said he expected the project to materialize in the next three to five years.
Osaka Gas is a key player in Japan’s LNG market. Itimports 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 facilities.