Philippines in talks with U.S., Canada, Australia for supplies
The Philippines plans to begin importing liquefied natural gas (LNG) in the next four to five years and is in talks with U.S., Canadian and Australian suppliers, Energy Undersecretary Jose Layug said on Tuesday. “In four to five years, hopefully we will begin commercial activity for LNG. A decision on how we will import the gas, including looking at floating vessels, will be decided by the end of this year,” Layug told reporters on the sidelines of an industry conference in Singapore.
LNG is seen as the main source to meet the country’s expected 5,000 megawatt per day domestic demand for gas-fired power in 2016, up from the current 2,700 megawatts, he said. “We are conducting feasibility studies on which areas are appropriate for a LNG receiving terminal, a pipeline, even for a floating vessel. We are awaiting the masterplan by year end. They are looking at Luzon and Manila Bay — very likely Luzon will be the hub,” Layug said.
The country’s main island of Luzon currently gets 30 percent of its power from the Philippines’ Malampaya gas project, but production from the project is expected to begin depleting within a few years. In July, the Philippine government said it would move forward with a $1.5 billion expansion of the Malampaya natural gas project with its partners Shell Philippines Exploration B.V., a unit of Royal Dutch Shell and Chevron Malampaya LLC, a unit of the U.S. energy firm .
Global LNG demand is increasing rapidly, especially in Asia, with Southeast Asian demand alone to reach nearly 25 million tonnes by 2020 by some estimates. Prices have shot up in recent months, but Layug said the Philippines is hoping prices will plateau when they enter the market. “We are hoping that LNG prices won’t be far out from Malampaya gas. Right now LNG prices are a bit on the side because everyone is buying it but perhaps four to five years from now it will level off a bit,” Layug said.
Source: Reuters
