Meralco unit, Shell tie up for nat gas proj

MANILA, Philippines - The power generation unit of Manila Electric Co. (Meralco) has partnered with Shell Companies in the Philippines (SCiP) for a natural gas power project in Southern Luzon.

In a disclosure, Meralco PowerGen Corp. said it signed a memorandum of understanding (MOU) with SCiP for the possible supply of liquefied natural gas (LNG).

“Meralco PowerGen is looking at the viability of putting up a LNG-fired power plant in Batangas supplied by a planned LNG regasification terminal of SCiP,” the company said.

Under the MOU, Meralco PowerGen will conduct a feasibility study for a power plant that will be located along the proposed Batangas-Manila pipeline of the Department of Energy (DOE).

The LNG plant will also be adjacent to SCiP’s Tabangao oil refinery in Batangas.

“The setting up of an LNG-based combined cycle power plant is meant to address fuel diversification as well as address the mid-merit capacity needs of the Luzon grid,” said Meralco PowerGen executive vice-president and general manager Aaron Domingo.

“This collaboration with SCiP helps pave the way for facilities that ensure a reliable and competitively-priced power supply,” Domingo added.

Meralco Powergen plans to reach a generation capacity of 2,500 megawatts (MW) from now until 2020. The company’s 600-MW coal-fired power plant in Subic, its first power project targeted for commercial operations in 2016, is hampered by environmental concerns.

Meralco PowerGen said its new projects will ensure sustainable and efficient power generation amid concerns on the availability of electricity supply in the future.

“This agreement opens the door for greater use of cleaner energy and enhanced energy security for the Philippines,” said SCiP country chairman and president Edgar Chua.

LNG is natural gas that has been converted into a liquid state for easier storage and transportation. LNG is regasified prior to distribution through pipelines as natural gas.

In June, the oil industry giant signed an agreement with the DOE for a joint technical feasibility study of putting up an LNG import terminal in Batangas.

“The combination of the power plant, the regasification terminal and pipeline will spur further growth of the natural gas industry in the country,” SCiP said.

The Philippine government has a $2.1-billion natural gas master plan, which includes the construction of an integrated Bataan LNG terminal and several LNG-fired power plants.

The DOE wants state-owned PNOC Pipeline Corp. to own and operate the $120 to $200-million Batangas-Manila LNG pipeline, which is in line with the government’s plan to reduce the country’s dependence on oil imports.