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Philippines shortlists six countries for US$2 billion LNG hub

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Reuters are reporting that the Philippines has shortlisted six countries and will choose one from them as a partner for its planned US$2 billion receiving and distribution facility for imported LNG.

The countries that have been shortlisted are China, Japan, South Korea, Singapore, Indonesia and the UAE.

The construction of the project, which includes a 5 million tpy storage facility, could be completed by 2020, or four years before the country's Malampaya natural gas field is depleted.

The Philippines' energy demand is set to triple by 2040, with electricity requirements anticipated to grow four times from 2015. To support this spike, the country needs to step up power generation capacity by 7000 MW over the next five years and wants foreign investors to help.

Philippines aims to start importing LNG before Malampaya gas, currently used to produce a fifth of the country's power supply, runs out by 2024.

PNOC is looking to use government-owned banked or unused gas from Malampaya, currently valued at about US$640 million, as equity for the LNG project, together with the government land where the facility will be built.

On the government-to-government partnership for the project, PNOC is pushing for a 60-40 equity arrangement, with the Philippines taking a controlling interest.

First Gen, which owns four Malampaya gas-powered plants with a total capacity of 2011 MW, could also invest in the LNG hub, possibly taking a portion of PNOC's 60% stake.

Several companies, including First Gen and the local unit of Royal Dutch Shell Plc which operates Malampaya, had planned to build LNG storage facilities in the Philippines before the government came up with its own project.

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