The Department of Energy issued a notice to proceed to Atlantic Gulf & Pacific Company of Manila Inc. on its liquefied natural gas project in Batangas province.
“We have approved the NTP of AG&P,” DOE director Rino Abad said.
Investors interested to participate in the emerging LNG industry should secure an NTP from DOE prior to moving ahead with the project.
AG&P plans to put up an LNG import facility that will supply re-gasified LNG to the 1,200-megawatt Ilijan natural gas power plant.
AG&P said in a report to the Department of Environment and Natural Resources in September 2020 the project with an estimated budget of $315 million would be adjacent to the Ilijan power plant, which secures natural gas from the Malampaya project.
The Ilijan natural gas plant’s supply contract with Malampaya will expire in June 2022.
“AG&P is targeting to commission this import facility by June 2022 so that the power plant can seamlessly secure supply and continue its operations thereafter,” the company said in the report.
The LNG project will employ an onshore terminal-based re-gasification facility that is often applied over longer distance transport of LNG by ocean-going vessels.
It said LNG would be re-gasified into natural gas at a land-based terminal, which receives it from vessels (LNG carriers) that transport LNG produced at liquefaction plants.
“The project will contribute to the national economy, improve the quality of life of the people and meet the projected need for power in the Luzon grid,” AG&P said.
The project will require around 1,500 direct and indirect workers during the construction period. Personnel will include operators of heavy equipment and construction workers for support facilities and administrative personnel.
AG&P said if the project would not push through under a ‘no-go’ alternative, the Ilijan power “would either be decommissioned or converted to run on more expensive and higher emission fuels such as condensate and diesel.”
“If the power plant will be decommissioned and replacements will not be built in time for this, the Luzon grid will experience major power outages. In addition, the projected social and economic benefits of the LNG Import Terminal Project will not be realized. These include employment generation, local business growth, increase in government revenue through local and national taxes and permitting fees, host community development through the corporate social responsibility programs, among others,” it said.
SMC Global Power Corp., the independent power producer administrator of the Ilijan power plant, is in advanced stages of executing a binding term sheet on the terminal use agreement with AG&P to provide LNG receiving, storage and regasification services to the Ilijan power plant and the Ilijan expansion project.