AG&P investing $315M in LNG facility in Batangas to supply fuel to Ilijan plant

Atlantic Gulf & Pacific Company of Manila Inc. plans to put up a liquefied natural gas import facility in Batangas City to supply re-gasified LNG to the 1,200-megawatt Ilijan natural gas power plant, documents filed with the Department of Environment and Natural Resources show Friday.

AG&P said in a report to the DENR the project with an estimated budget of $315 million would be built near the Ilijan power plant, which buys its gas from the Malampaya gas field whose supply contract 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 regasification facility that is often applied over long-distance transport of LNG by ocean-going vessels.

It said LNG would be regasified into a natural gas at a land based terminal, which would receive it from LNG carriers that transport LNG produced at liquefaction plants, to the Iijan power plant.

“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. The Personnel will be mostly composed of operators of heavy equipment and construction workers for support facilities and administrative personnel.

AG&P said that 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.

Based on the TUA, SMC negotiated “priority status” for the Ilijan LNG terminal over all projects of AG&P and as the foundation customers, SMC’s power plants would also be the priority terminal users for the terminal and its capacity.

Topics: Atlantic Gulf & Pacific Company of Manila Inc , SMC Global Power Corp , Ilijan LNG terminal
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