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Philippines eyes US$2 billion storage facility for LNG imports

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Reuters are reporting that the Philippines aims to build a US$2 billion receiving and distribution facility for imported LNG, as it seeks to replace depleting domestic gas reserves that now produce a fifth of its power.

Construction could be completed by 2020, or four years before the Malampaya natural gas field is depleted.

The Philippines' energy demand will triple by 2040, with electricity requirements anticipated to grow four times from 2015.

The Philippines needs to step up power generation capacity by 7000 MW over the next five years to support a fast-growing economy and wants foreign investors to help.

Chinese and Japanese companies are among the foreign investors who want to help build energy infrastructure, including LNG facilities.

The LNG project, which includes a 200-megawatt power plant, is among the investment opportunities up for grabs in the country's long-term energy plan, which seeks to add power capacity of 43 765 MW by 2040.

Several firms have expressed interest in building LNG facilities in the Philippines, including Manila Electric Company, formerly in talks with Osaka Gas Co Ltd for a joint venture. Energy authorities said the talks halted because both decided to separately reassess the power supply situation.

In April Philippine power producer First Gen Corp said it was willing to work with the government to build a US$1 billion LNG terminal to sustain its gas-fired power plants currently running on Malampaya gas.

The operator of Malampaya, a unit of Royal Dutch Shell Plc, has also been looking to set up a floating regasification facility to sell LNG in the Philippines.

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