Philippines Considers LNG Import Receiving Options

"We expect to be ready to operate at the end of this year or early 2015," EWC CEO Stewart W. G. Elliot told Reuters June 9.

The Pagbilao import hub is expected to be equipped to have an initial capacity to ship in 3 million tons of LNG a year. While the power plant will consume most of the imports, EWC plans to make gas available throughout the Philippines, distributing by sea to coastal terminals and by land via road tankers.

Meantime, key issues facing any future LNG import receiving developments in the Philippines centered on their commercial viability and government support.

“The commercialization challenge [is to] develop a market for LNG that can justify the investment in the LNG importation facilities … It is not about government guarantees, government construction of infrastructure or long term inflexible gas purchase contracts,” Saguin highlighted.

Even so, the “government clearly needs to help LNG, because right now everybody is focused on the cheapest [energy source] which is coal," Jesse Ang of the World Bank's International Finance Corp. told Reuters.

The switch towards greater use of LNG – together with the development of relevant facilities like import terminals – hinges on whether coal loses its appeal as a cheap fuel source in the Philippines.

For the foreseeable future, coal will remain an important contributor to domestic energy supply as the government is optimizing exploration, development, production and utilization of indigenous coal reserves, as stated in the 2012-2030 Philippine Energy Plan. Most utility companies are therefore quite reluctant to invest in gas-fired power plants as coal is considered to be the most viable energy source.


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