LNG initiative pushed by PNOC


STATE-OWNED Philippine National Oil Co. (PNOC) is planning to sell unused stocks from the Malampaya gas field for the construction of a local liquefied natural gas (LNG) facility.

PNOC is considering either trading the gas stocks overseas or extracting and selling it locally as electricity, documents submitted to House Minority Floor Leader and Quezon 3rd District Rep. Danilo Suarez showed.

he Malampaya gas field, located off Palawan, is expected to be depleted by 2024. PHOTO FROM THE SHELL PHILIPPINES WEBSITE

With the imminent depletion of the Malampaya gas field, “it becomes imperative that PNOC extract and fully recover the remaining purchase cost as well as optimize its potential value at the earliest time possible which should be before the end of 2024.”

The company, however, recognizes that “international trading may be challenging since the physical transport of gas is not viable unless it is converted to liquid state through liquefaction.”

But selling the gas in the domestic market also poses certain problems.

Ilijan Power Plant and five First Gen Power Plants have gas sales and purchase agreements (GSPAs) covering Service Contract (SC) 38, which they can invoke to obtain the required volume anytime the need arises.

With the GSPA to expire in five years at the earliest, the opportunity to sell locally the unused gas can only begin in 2022. By then, it might be too late to initiate the LNG initiative with the Malampaya gas field expected to be depleted in 2024.

PNOC noted the second option may be more feasible with the adoption of a floating storage and regasification unit to gas-fired power plant technology.

The availability of this technology makes burning the gas and selling it as electricity the better option and can be started as early as 2018.

In September 2009, PNOC acquired from the Department of Energy (DoE) all the rights, benefits, and entitlements of the banked gas estimated at 108.6 petajoules (PJ) and valued at P14.4 billion.

In 2013, the Power Sector Assets and Liabilities Management (PSALM) Corp. purchased 4.61 PJ for P937 million and Pilipinas Shell Corp. bought 6.324 PJ for P2.5 billion.
PNOC data show it still has 97.67 PJ valued at P11.9 billion.

In November 2016, power outages in Luzon prompted the DoE to ask for a study on a new power plant using clean energy. The PNOC was tasked to do the study.

PNOC proposed to build a 200-megawatt natural gas power plant in Batangas, which would be fueled by banked gas from the Malampaya facility off Palawan.


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