State-run Philippine National Oil Co. (PNOC) targets to make the first delivery of small scale liquefied natural gas (ssLNG) in the Bangsamoro Autonomous Region of Muslim Mindanao next year to enhance energy security, reduce diesel reliance and support economic growth.
“We hope to make our first delivery in 2026. We won’t be investing in the LNG generating units. We will focus on the logistics to bring small scale LNG to Mindanao. We’ll undertake a study to determine costs and returns,” PNOC president Oliver Butalid said.
He said PNOC decided to venture into ssLNG to replace National Power Corp.’s (NPC) diesel plants with lNG in off-grid areas “to reduce generating costs and lower subsidies shouldered by all Filipino electricity users.”
PNOC said it plans to engage a consultant, with an approved budget of P5 million, to assess the viability of the company’s entry into the ssLNG distribution business, including long-term strategic implications, market positioning and alignment with energy supply security goals.
The consultant will conduct a pre-feasibility study to assess the technical, financial, regulatory and environmental aspects of ssLNG deployment, guiding investment decisions and ensuring alignment with national and regional energy policies and development thrusts.
PNOC said it would focus on gas supplies and making gas available to marginal and peripheral markets using ssLNG and strategic pilot locations include Tawi-Tawi, Basilan, Jolo, and Polloc, which were chosen for their economic potential, logistical significance and urgent energy needs.
These areas will test ssLNG applications for industries like fisheries, manufacturing, and trade, aligning with regional development strategies, including the Brunei Darussalam–Indonesia–Malaysia– Philippines East ASEAN Growth Area (BIMP-EAGA) framework, it said.
It said that by ensuring gas availability, the transition from diesel to gas in NPC-Small Power Utilities Group areas would lower power generation costs, enhance the affordability of electricity, strengthen the reliability of power supply for industrial parks through embedded generation and promote sustainability by reducing CO₂ emissions.
PNOC said it also aims to support the development of self-generating industrial parks (SGIP) to boost economic growth in the region, serving as anchor loads for LNG demand and further supporting the viability of ssLNG infrastructure.
These industrial parks will use LNG, when made available, as the primary source of fuel in lieu of diesel as the extant source.
Butalid earlier said Indonesian state-owned oil and gas firm Pertamina and Malaysia’s Petronas could provide ssLNG once proven viable.