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LNG project in the Philippines put on hold

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LNG Industry,

According to Reuters, plans to construct a US$2 billion LNG project in the Philippines have been put on hold by backers CNOOC Gas and Power and Phoenix Petroleum Philippines Inc.

Reuters reports that the Tanglawan LNG hub venture was supposed to have a capacity of 2.2 million tpy, with startup targeted by 2023. In order to support the facility, Phoenix was also planning to construct a 2000 MW power plant.

According to Reuters, the two companies jointly requested that the Department of Energy (DoE) put the project on hold after Pheonix parent Udenna Corp. acquired a 45% stake in the Malampaya natural gas consortium.

Reportedly, Phoenix now wants to reassess the project, and plans to submit a new concept to the DoE.

Last month, Udenna reportedly signed an agreement to acquire Chevron’s 45% stake in the Malampaya gas-to-power project. Malampaya is operated by Shell Philippines Exploration BV, and provides fuel for power plants with a combined capacity of over 3000 MW. Shell holds a 45% stake, whilst Philippines National Oil Co. holds the remaining 10%.

According to Reuters, it is expected that the Malampaya gas field (which is located in the South China Sea) will deplete within the next decade. However, Reuters adds that operations at the field may go beyond the 2024 expiry of Shell’s contract with the government, as it is likely that further development will be pursued.

Shell has reportedly already made a request for a contract extension, as it believes the field will be capable of producing gas post-2024.

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