Reason for delayed LNG project sought
Credit to Author: JORDEENE B. LAGARE| Date: Tue, 02 Jul 2019 16:21:29 +0000
The Department of Energy (DoE) said it would wait for answers as to why Tanglawan Philippine LNG Inc., the joint venture of Phoenix
Petroleum Philippines Inc. and CNOOC Gas and Power Group Co. Ltd. (CNOOC G&P) needs more time to develop a liquefied natural gas (LNG) terminal in the country.
“What I heard is they will ask for an extension,” Energy Secretary Alfonso Cusi said on Monday. “I still have to receive [their application].”
The notice to proceed (NTP) issued by the Department of Energy (DoE) to Tanglawan in December last year has already expired last month.
“Their NTP expired last June 22 but I am unaware if they have already filed their motion for extension,” Energy Assistant Secretary Leonido Pulido 3rd said in a text message on Tuesday.
When asked if the firm would face sanctions for failure to jump-start the LNG terminal within six months from the issuance of the NTP, Cusi said the agency “will wait for their justification [as to why] they did not make it. We still have to hear that.”
While the Energy chief implied that Tanglawan’s NTP might be canceled for failing to meet the deadline, the DoE has to check the reasons for the delay and if it encountered hurdles in meeting their timeline.
The issuance of NTP is governed by Department Circular DC2017-11-0012, also known as the Philippine Downstream Natural Gas Regulation (PDNGR).
Under the circular, the Downstream Natural Gas Review and Evaluation Committee (DNG-REC) may allow any request for extension, with the approval of the DoE Secretary, but only in case of force majeure or unforeseeable circumstances.
“The DNG-REC may recommend, for the approval of the DOE Secretary, the modification of any condition of any permit upon application by the operator but subject to applicable provisions of this circular and its annexed guidelines,” according to the circular.
Phoenix Petroleum previously disclosed it was targeting to begin commercial operations of its LNG hub by end-2023. It was previously planning to break ground the facility within this year.
The LNG project plans a regasification and receiving terminal with a capacity of 2.2 metric tons per annum. It also includes developing a gas-fired power plant with an installed capacity of up to 2,000 megawatts.
In March, Phoenix Petroleum; CNOOC G&P, subsidiary of China National Offshore Oil Corp. (CNOOC); and state-run Philippine National Oil Co. (PNOC) signed a memorandum of understanding (MoU) for the planned LNG terminal in Batangas province.
The MoU would enable the three firms to explore and discuss business opportunities and cooperation in relation to the equity investment in Tanglawan and other companies; PNOC facilities and banked gas; market development; and future energy projects.
Tanglawan is one of the three entities that received a green light to construct an LNG hub in the country. The other two firms are FGEN LNG Corp., a subsidiary of Lopez-led First Gen Corp. which has a joint development agreement with Japanese firm Tokyo Gas Co. Ltd.; and Australian firm Energy World Corp. Ltd. (EWC).
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