CEED warns vs using imported LNG


The Center for Energy, Ecology, and Development (CEED) questioned the Philippine government’s promotion of liquefied natural gas (LNG) as the solution to the country’s power crisis

The statement follows after Atlantic, Gulf & Pacific Company (AG&P) received the country’s first LNG cargo in Batangas City from Vitol Asia Pte. Ltd. 

South Premiere Power Corp. of San Miguel Corporation is involved in an ongoing price and procurement dispute The 1,200 MW Ilijan gas plant and another facility owned by SMC subsidiary Excellent Energy Resources Inc. are two gas plants that are expected to benefit from the AG&P terminal. 

“The delivery is being celebrated as a solution to the power crisis, but LNG carries more problems than solutions for power cost and security issues we confront,” explained Gerry Arances, Executive Director of CEED.

He further explained that the global supply of LNG has been unstable since the beginning of the Russia-Ukraine war and the long-term contracts for the supply have already been sold out.

Citing the analysis of the Institute for Energy Economics and Financial Analysis (IEEFA), Arances said that the price of LNG might rise from an estimated PHP 9 per kilowatt-hour (kWh) to PHP 16 per kilowatt-hour if the energy companies in the Philippines gain access to the supply.

IEEFA said that Southeast Asia’s LNG industry, which was once projected to be a hotspot for global demand growth, may face “financial challenges amid high prices and difficulty in procuring supplies, as well as currency and inflationary pressures.” 

Arances emphasized the availability of alternative energy solutions that do not carry the same severe risks as LNG and other fossil fuels.

“Renewable energy is affordable and readily available in the country, on top of being more environment-friendly. Biddings under the Green Energy Auction Program (GEAP) resulted in prices as low as PHP 3.40/kWh in 2022. A new round of auctions in June would soon allow over 11,600 MW of new renewable energy capacity to come online in the next few years,” the CEED official noted. 

By considering LNG, CEED saw concern about the expenses to be carried by the customers and the flow of the energy coming in since the said energy is to be shipped when renewable energy is readily available and within reach.