DOE-led Philippine National Oil Co. (PNOC) was asked to conduct a feasibility study on the curious inclusion of a P500 million budget for its LNG project to ensure if the government should invest into it, the Senate Committee on Energy said.
In a panel meeting, PNOC Senior Vice President for Management Services Glenda Martinez was questioned about the agency’s request, to which she said the property allocation is for the LNG project’s development.
“Presently, we have several locations that we are looking at. From those real estate properties, we are providing for the acquisition of those,” she said.
However, Senator Sherwin Gatchalian pointed out the request will only be approved if the DOE arm will submit a feasibility study on the project.
“I admire the bold vision of the [Department of Energy] Secretary [Alfonso Cusi] to go into this LNG hub… It’s really a vision for the energy future of the country. But of course, we need to study this very carefully… we would also have to clear the feasibility as well as the potential of this project,” Gatchalian said.
The big-scale LNG proposal will be built to supersede the Malampaya plant after its depletion by 2024. DOE Chief Alfonso Cusi said the upcoming LNG facility is expected to supply 3,500-MW of power capacity normally released by the aging Malampaya.
Cusi added the PNOC volunteered to revise its budget proposal and submit it back to the Senate Sub-Committee on Finance on the next hearing with the National Electrification Administration and National Power Corporation.
“We will look into that, why we’re going to buy that land. But that feasibility study, I know, the private proponents, like China and Japan, they make their own study and that was submitted to PNOC and that is the basis of PNOC in making the decision,” he said.
Earlier, the DOE directed the PNOC to develop an integrated LNG hub complete with storage, liquefaction, regasification, and distribution facility, along with an initial power reserve of 200-MW power capacity.
The state-run agency was also looking into a government-to-government (G2G) partnership for the project with a $640 million budget of banked gas and land as forward equity, to which has attracted at least 26 interested investors from China, Indonesia, Japan, Singapore, South Korea, and the United Arab Emirates (UAE).
But the PNOC failed in finding the right collaborator before its end-July deadline. Since then, the Energy Department decided to include the private sector’s participation in investing in the LNG hub.