Meralco eyes LNG imports
Friday, Oct 06, 2017
The Philippines continues to try to jumpstart its LNG sector after several failed attempts.

The latest effort saw power company Meralco inform state-run Philippine National Oil Co. (PNOC) that it is interested in investing in the country’s first LNG project.

Meralco is the country’s largest power distributor. It owns the power distribution franchise for 22 cities and 89 municipalities in the National Capital Region surrounding Manila.

“We indicated to PNOC our interest to any development in LNG,” said Meralco’s president, Oscar Reyes.

The Philippine government has already tasked PNOC with developing an integrated LNG hub with storage, liquefaction and regasification capacity, as well as a reserve initial power-plant capacity of 200 MW. But the project has been mired in uncertainty and indecision at both the government level and within PNOC itself.

Reyes said Meralco was “looking at [the project]. He added that when his company pushed through with its plan to venture into LNG, it would have to pursue this together with “credible partners.”

“We have to partner with a strategic partner because that validates your decision,” he said. “Somebody else looking and saying yes to it adds credibility to the project that we are pursuing.”

Such partners might not emerge in the Philippines, which would make the entry of foreign investors an alternative option to pursue.

Meralco’s interest in the LNG project comes as natural gas reserves in the offshore Malampaya natural gas field in the South China Sea near depletion. Estimates vary, but most agree that its reserves will be will be fully depleted by 2022 or 2023.

The field supplies three gas-fired power plants in the Philippines. They provide 40-45% of power generation requirements in Luzon, the country’s main island, which includes the capital Manila and its population of around 20 million.

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