Indonesian firm pursues LNG investments in off-grid areas

MANILA, Philippines — Indonesian firm JSK Gas Corp. is looking to invest in the liquefied natural gas (LNG) sector in the Philippines that would replace diesel-fired power plants in off-grid areas.

The company has formed JSKLNG Holding Phils. Inc. to pursue its LNG investments in the country.

In an interview, JSKLNG director Richard Moon said they have proposed to the Department of Energy (DOE) to install floating LNG power plants with capacities of between 20 megawatts (MW) up to 300 MW in the Small Power Utilities Group (SPUG) areas under the National Power Corp.

“We are proposing a floating barge mounted LNG power plant for Palawan, Mindoro and other SPUG areas. We also scouted Bohol and Leyte,” he said.

JSKLNG is in discussions with several Visayas electric cooperatives for the possible shift to LNG power plants, Moon said.

“We have a local partner and we are still looking for local partners in other regions in the Philippines,” he said. “We are now discussing with a local partner in Palawan and Mindoro for the floating power plant.”

Apart from the LNG power plant, the investments will also create by-products such as ice plants, cold storage, distilled water facility and compressed natural gas, which can help the local industry in the off-grid islands.

 “LNG is very low temperature so when we convert it to gas, we have to increase the temperature. With this power plant, cold storage and ice plant is a by-product, almost free,” Moon said.

 “We promote this to local communities so most of local government units, they like our power plant because they can help the fishing industry and aquaculture,” he said.

However, the company is waiting for the issuance of the Philippine Natural Gas Regulation (PNGR), the policy framework that will guide the development of the natural gas industry in the country, before pursuing investment opportunities.

“We fear that when our power plant arrives here, DOE will say that we have to wait for our permit. That is why we are waiting for their regulations on LNG power plants,” Moon said.

The DOE is currently holding a series of public consultations on the PNGR in preparation for the depletion of indigenous natural gas supply from Malampaya by 2024, Energy Secretary Alfonso Cusi said.

After completing the public consultations, DOE-Oil Industry Management Bureau (OIMB) director Rino Abad said the policy is targeted to be submitted to Cusi by November.

In coming out with the draft PNGR, the DOE has considered the expected drop in indigenous natural gas supply coming from Malampaya gas field by 2024.

It said LNG could cover the increasing mid-merit to peaking demand of the Philippines which is expected to require around 18,500 megawatts (MW) by 2040 based on the Philippine Energy Plan (PEP). It can also complement renewables, which are poised to increase from 5,000 MW to 15,000 MW by 2035.

LNG also has the potential to replace diesel-fired power plants in off-grid areas.

The DOE also noted the expected non-power demand for natural gas from the commercial, industrial, transportation and even household sectors.