US company invests P11b in Batangas gas import terminal

Texas-based Excelerate Energy LP said Wednesday it is developing the country’s first open access liquefied natural gas import terminal off Batangas Bay with an investment of P11.3 billion ($ 230 million). The open access LNG project is expected to be completed by the second quarter of 2022, as the Philippines prepares for the depletion of the Malampaya natural gas field. “We will soon present our permit to build, expand, rehabilitate and modify to the Department of Energy, which are the next steps to bring this important facility into operation nationwide as early as the second quarter of 2022”, Ramon Wangdi, President of Luzon LNG Terminal Inc., the local subsidiary of Excelerate, said in a statement. Excelerate is preparing to begin construction on the Philippines LNG Gateway project and will submit its PCERM application within a year. Under the open access model, Philippines LNG will provide access to all power plants in Luzon that use natural gas as a fuel to generate electricity. “Since receiving a notice to proceed from the Philippine DOE in late 2019, Excelerate has worked diligently to develop Philippines LNG so that the energy markets can be prepared for the next chapter after Malampaya,” said Wangdi. He said Excelerate and local partner Topline Energy and Power Development Corp. made significant progress on the project despite substantial challenges brought on by COVID-19 and its resulting lockdowns. Supply from the Malampaya gas fields on the northwest coast of Palawan began to decline and the Philippines LNG said its LNG project would address the country’s need to supplement and eventually replace Malampaya by supplying a rapid gas solution. , reliable and sustainable. The terminal will use Excelerate’s next generation offshore floating storage regasification unit technology, designed to operate in extreme weather conditions. The technology was tested at Excelerate operations in the United States within the Gulf of Mexico and the North Atlantic, Israel and the Bay of Bengal, he said. “Reliability is critical to fueling power plants, and when it comes to LNG, there is no substitute for experience,” said Wangdi. Having developed and operated more than half of the floating LNG import terminals in 13 countries around the world, Excelerate brings 50 years of operating experience to the Philippines LNG.

“Excelerate is the only company with unique and unrivaled industrial experience that can carry out this complex project,” he said. The project will have an import capacity of approximately 5 million tons of LNG per year and will supply fuel for up to 4,000 megawatts of base load power generation, enabling it to serve multiple power plant customers in Luzon. Philippines LNG follows the DOE’s third-party access model in which LNG import capacity is traded to multiple gas users in the region in an open and transparent manner. “A distinctive feature of the Philippines LNG ‘TPA’ model is that it allows all gas users in the region unrestricted access to the global LNG market by enrolling in regas capacity at the terminal,” said Wangdi. He said this is the opposite of the “own use” model where separate LNG terminals are being built for each independent power plant. Wangdi said that the Philippine LNG open access model, which has been successfully adopted in major LNG markets around the world, enables substantial economies of scale, the cost savings of which are ultimately enjoyed by Luzon’s electricity consumers. “The energy markets in the Philippines are dynamic and will change over time. Unlike comparative ‘own use’ solutions, TPA’s open access floating facilities allow gas users to enter into shorter-term contracts for quantities that meet their specific requirements. This method is very efficient as there is less ‘wasted’ capacity due to underutilization, ”said Wangdi. Offshore LNG facilities, such as the Philippines LNG, also have a smaller onshore environmental footprint, a key feature for ecologically sensitive environments like those in Batangas Bay. This, he said, allows LNG imports to be implemented in a sustainable manner, regardless of which way energy markets are headed in the future. “Under almost any scenario, we see that LNG plays an important role in supporting fast-growing economies like the Philippines that want to increase their energy supply in a reliable, competitive and clean way. In the long term, we believe that the strategic offshore location of the terminal will allow the Philippines LNG to act as an LNG distribution center for the delivery of natural gas to end users in the Philippines, ”said Wangdi.