• Shell to set up first LNG import terminal

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    Pilipinas Shell Petroleum Corp. is pushing through with its plan to build  an import regasification terminal for liquefied natural gas (LNG) in the Philippines, with the final investment decision for the project to come out in the next 12 months.

    The decision that the project is commercially feasible came one year after Shell signed an agreement with the government, committing to do a feasibility study in building an LNG terminal nearby its existing refinery in Tabangao, Batangas.

    Now that the feasibility study is done, Energy Secretary Jericho Petilla said that Shell had most likely committed to pursue the LNG import terminal project.

    “There are no talks on figures [project cost]at this point. This is more like commitment on the project that they are going to put up here,” Petilla told reporters on Friday after the Department of Energy’s closed-door meeting with Shell regarding the project.

    The feasibility study, which Shell completed this month from the time the memorandum of understanding with the government was finalized, involves building an offshore LNG import terminal with a floating storage regasification unit (FSRU).

    Steve Porter, senior business development manager of Shell’s Upstream International, explained that the firm came up with the decision to use FSRU because it suits an LNG ship that has the ability to turn a liquid LNG into gas and this, according to him, is a far lower cost and faster solution. It is also reliable.

    “Having the feasibility study, we found out that this place is a good place to make the investment. So we have to do the more detailed work, address technical and economical issues. It is going to take us 10 to 12 months to make the final investment decision,” he said.

    “The work we’ve done over the past year was focused in the site in Tabangao next to our refinery, and we think that’s quite advantageous because of its location,” Porter added.

    He also specified that Shell is looking at a capacity of 170,000 cubic meters for its FSRU.

    “It’s fairly sizable ship. And I think it can support, we have capacity for over 2,000 megawatts of power plants on our side,” he further said.

    Roger Bounds, vice president of Shell’s Global LNG Upstream International, meanwhile, said that they have yet to come up with a final decision on how much will the project would cost them.

    “Shell does not come up with the capital cost of the project. Its two to three years from the final investment decision before becoming operational. In the next 12 months, we’ll make the final investment decision,” he said.

    “[It will be built] around 2016 to 2017, which will still depend on the final investment decision,” Bounds added. The final investment decision involves the project cost, the importation of materials, the off-takers and detailed design, among other things.

    The project was previously estimated by the government to cost about $1 billion.

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