Shell Philippines is pushing for an energy mix policy aimed at minimizing dependence on coal for power production and ensuring that there is a ready market for liquefied natural gas (LNG).
Shell Companies in the Philippines Chairman Edgar Chua said an energy mix policy would give incentives to LNG projects and spur its development.
“We’ve been pushing for an energy mix policy…If you don’t have an energy mix policy, the default of IPPs (indepedent power producers) is to build a coal-fired plant and dispatch based on lowest generating costs,” Chua told reporters on Thursday.
He explained that commercial off-takers would sign up only if there is a policy guaranteeing that there is a market for power produced from LNG.
In line with the call, Chua said the company is also pushing for the expansion of its planned LNG facilities that will be constructed in phases.
“This will be in phases, first phase is floating storage and re-gas, because we can live with 1,500 MW (megawatts) to 2,000 MW. And if this increases, build an on-shore facility, so it won’t be expensive and will be fast,” he said.
In 2013, Shell announced its decision to proceed to front-end engineering and design for a LNG import facility in Batangas that will be carried out by Shell’s Technology Centre Bangalore, which delivers advanced technical studies, projects and services for Shell around the world.
Shell claims that its decision to conduct the project design study for its floating storage and regasification facility underscores the company’s commitment to undertake the project.
For his part, Roger Bounds, Shell’s Vice President Global LNG earlier noted that the Batangas LNG project would increase the supply of natural gas, the cleanest-burning fossil fuel in the country.
“Our ability to meet our customers’ long-term energy needs and respond flexibly to short-term changes in demand will help ensure diversity and security of supply to the respond flexibly to short-term changes in demand will help ensure diversity and security of supply to the Philippines,” Bounds said.
Shell proclaims that it has over 50 years of experience in processing LNG.
“We look forward to successfully implementing the first floating storage and regasification unit in the Philippines. This will help enable continued gas supply into the future, beyond the life of the Malampaya asset,” said Chua.
The LNG facility will be adjacent to Shell’s 110,000 barrels per day refinery in Batangas City.
Shell already conducted the feasibility study on LNG processing. It considered several options and concluded that setting up the floating storage and regassification unit is the preferred option at present. RITCHIE A. HORARIO