The Department of Energy (DOE) has signed a memorandum of understanding (MOU) with Germany-based MAN Energy Solutions SE (MAN ES) as part of the government’s efforts to develop the country’s downstream natural gas industry.
Through the memorandum, a feasibility study will be conducted on the development of small-to-medium scale liquefied natural gas (LNG) importation and regasification to power projects in Visayas and Mindanao.
“We have always been very vocal about our desire to fully develop the downstream natural gas industry of the Philippines,” Energy Sec. Alfonso Cusi said in a statement.
“Studies such as the one that MAN Energy would be conducting contribute to this goal, given that the ability of our natural gas industry to reach maturity depends on the development of the necessary infrastructure such as LNG receiving terminals, gas transmission and distribution pipeline networks, and other ancillary facilities,” he added.
MAN ES will also determine the necessary infrastructure and transportation facilities, as well as the required mixed modes of land and sea transport that will provide natural gas supply in an economical manner.
The DOE says the feasibility study will be available for public consumption, especially for investors who are interested in developing LNG facilities in the VisMin area.
“Should the findings of MAN Energy Solution’s Report be favorable, it would definitely pave the way for the entry of much-needed capital investments in Visayas and Mindanao,” Cusi said.
“If not, the Report’s results will still help guide us in recalibrating our strategic direction. So regardless of the study’s outcome, we are optimistic that our partnership would go a long way in helping make our natural gas aspirations a reality,” Cusi emphasized.
The DOE has been approving LNG import terminal projects, mostly located close to the Philippines’ five existing natural gas power plants in Batangas City, as the Malampaya gas field’s resources continue to dwindle. Malampaya, the country’s only major source of indigenous fuel, supplies a third of Luzon’s power demand.
Atlantic, Gulf, and Pacific Co.’s LNG terminal, which will be connected to the 1,200-megawatt Ilijan gas plant, will commence commercial operations in July. Lopez-led First Gen Corporation, Shell Energy Philippines, Energy World Corporation, and Vires Energy Corporation also have LNG terminal projects in the pipeline.
Natural gas accounts for 25.7% of the country’s energy mix, based on data from the Independent Electricity Market Operator of the Philippines as of January.