Demand for liquefied natural gas (LNG) is expected to increase as Philippine output drops amid lower oil prices and maritime disputes in the South China Sea, a recent study by BMI Research showed.
BMI Research, a Fitch Group company, expects Philippine natural gas production to decline at a yearly average rate of 20 percent in the face of deferred offshore exploration.
The Philippine government has accelerated LNG imports as the Malampaya gas field enters the last phase of its production cycle, BMI Research noted. The depletion of the natural gas from the Palawan-based gas facility is projected in less than a decade.
The country is importing LNG for the first time this year, with the insufficient development of new projects to replace Malampaya.
Also, low crude prices and an industry-wide spending pullback have prompted companies to curb investment in frontier and emerging markets such as the Philippines.
Previously, state-owned Philippine National Oil. Co. received government-to-government proposals from China, Japan, Indonesia, Singapore, South Korea, and the United Arab Emirates to create an integrated LNG facility.
However, PNOC failed to meet a July 31 deadline to submit its recommendation to the Department of Energy as none of the proposals met revised 2013 guidelines set forth by the National Economic and Development Authority.