DOE works on LNG policy

MANILA, Philippines – The Department of Energy (DOE) is working on a liquefied natural gas (LNG) policy necessary to help the industry move forward and provide the country additional sources of power, a ranking official said.

In an interview, DOE Undersecretary Felix William Fuentebella said the agency has started gathering the latest data and information related to LNG for a comprehensive analysis of the industry.

DOE-Energy Resource Development Bureau (ERDB) and Oil Industry Management Bureau (OIMB) were directed to study the available indigenous resources and imported LNG, respectively.

“We are looking at policies on transparency and competition, policies as far as common carriers are concerned, what are our policies for anti-competitive behavior,” he said.

“I’ve asked LNG sources to report on the supply and competition issues and we’re taking a look at common carrier laws and the franchise requirements,” he said.

A coalition composed of government agencies and private sector was formed to report on developments the LNG sector, the DOE official said.

“Shell and First Gen are part of the coalition. I also asked government to collate and present the current data on LNG,” Fuentebella said.

The local subsidiary of energy giant Royal Dutch Shell and Lopez-led First Gen Corp., which have been vocal in pursuing LNG terminals in the country, are among the companies in the advanced stages in their respective projects.

Inputs from the various sectors will be collated and cemented by the DOE’s legal team, targeted to be finished by December, to form part of the LNG policy, Fuentebella said.

Earlier, DOE Secretary Alfonso Cusi said government will spearhead the establishment of a LNG terminal to ensure supply in light of the impending end of contract of the Malampaya deep water gas-to-power project in 2024.

He said Philippine National Oil Co. (PNOC), the DOE’s corporate arm, is initiating a study for the project.

The DOE is also in the process of reviewing the fuel mix policy “to find the correct mix.”

Cusi had sought for the rationale of the energy mix laid down by the previous administration in the form of 30 percent from coal, 30 percent from renewable energy, 30 percent from natural gas and 10 percent from oil-based power plants.

The DOE is “technology agnostic,” as far as looking for baseload or 24/7 power requirements and options include coal, LNG and nuclear, DOE Undersecretary Jesus Posadas in a forum yesterday.

In terms of capacity mix, he said the agency is looking at 65 percent from baseload plants, 25 percent from mid-merit plants and 10 percent from peaking plants.

“We’re looking at the power mix and basically the power mix is to address the economic growth especially the industrialization aspiration of the President,” Posadas said.