The Philippines may have found the energy solution to the lack of electricity in the countryside.
The introduction of modular or small-scaled liquefied natural gas power projects could answer the country’s quest for total electrification.
These modular LNG facilities are proven energy solutions that can be easily built and transported in islands around the country, thus securing power supply while putting the Philippines in the global LNG map.
The facilities are also flexible in terms of capacity, which can be scaled up if needed, making it an ideal energy solution especially to far-flung areas.
Proponents of LNG projects have answered the call of the Department of Energy to place the country as a Southeast Asia LNG hub in preparation for the eventual depletion of the Malampaya gas field in northwest Palawan, and are looking at modular LNG as possible markets.
“With the Malampaya gas field nearing depletion, quick action must be taken to safeguard our energy security. In response to this, the DOE has initiated the legislation and framework to establish the Philippines as a Southeast Asian LNG hub,” Energy Secretary Alfonso Cusi said.
“This plan, while ambitious, has been validated by the overwhelming interest we have received from global investors in a race to establish the first LNG hub in the Philippines. This LNG hub will serve the dual purpose of facilitating future LNG imports while taking advantage of drastic changes in the global LNG trade flows that has put the Philippines at the centre of global LNG trade,” Cusi said.
The energy chief added the LNG hub would be a vital lever of economic growth for the Philippines: new jobs for engineering and technical professionals not just in operations but in other related services such as LNG trading.
One of the active LNG project proponents, Lopez-led FGen LNG Corp., wants its planned LNG terminal in Batangas to become an LNG hub that could serve and provide gas to smaller islands around the country.
“We want to bring LNG to other parts of the PH, not just Luzon. So we’re excited with the idea of small scale LNG. We want to be able to bring it in other parts of Luzon, also other islands Visayas and Mindanao. There should be quite a lot of options to expand in the future but we need to start somewhere, we have to start with bringing it in. The only other choice is coal, which I think is a bad choice for the Philippines,” First Gen executive vice president and chief commercial officer Jon Russell said at the sidelines of Powertrends 2019 conference.
Russell earlier his company was “building a facility which allows smaller LNG vessels to be filled with LNG and they can sail within the islands and deliver LNG to smaller terminals we can establish throughout the islands.”
He said smaller power plants with a capacity of 50 MW or less that may want to switch to natural gas from diesel as a choice of fuel can do so.
“They can easily switch to LNG which will be more cost-effective and be much more environmentally friendly,” Russell said.
“The opportunity… it hasn’t been done to my knowledge anywhere in the world in this kind scale. It only really works in an island nation. The Philippines is perfect… but it’s an opportunity to do something that could be really world-class, it would be really something different for the Philippines,” the official said.
First Gen is pushing for its own LNG facility to meet the natural supply requirements of its power plants, namely the 1,000-MW Santa Rita, 500-MW San Lorenzo, 420-MW San Gabriel, and the 97-MW Avion power plants.
FGen LNG plans to initially establish a floating, storage and re-gasification unit (FSRU) at its energy complex in Batangas while its onshore LNG terminal is being constructed.
Meanwhile, Phoenix Petroleum Philippines and CNOOC Gas and Power Group Co. Ltd. of China are planning to put up their own LNG project under Tanglawan Philippine LNG Inc.
Tanglawan’s LNG hub project, specifically the re-gasification and receiving terminal with a capacity of 2.2 metric tons, is seen to start commercial operations by 2023.
There are also other companies interested in putting up their LNG projects, such as Excelerate Energy L.P., Dubai-based Lloyds Energy and Australian listed firm Energy World Corp.