MANILA, Philippines - The local unit of Hong Kong-based Energy World Corp. will spend $250 million for a liquefied natural gas (LNG) hub and a natural gas power plant in Southern Luzon.
Energy World Philippines is also ready to spend as much as $400 million for a hydropower project as it builds its portfolio in the country, an official said.
“For the terminal hub, initially we are building one worth $100 million...For the power plant, it is $150 million,” Eduardo T. Rodriguez, country manager of Energy World International Ltd. told reporters.
“We are now going to start our work for the 130,000 cubic meter LNG tank,” Rodriguez said, adding that the company has drawn funds from lenders like Standard Chartered Bank.
Energy World will start the operations of an LNG terminal in Quezon province in January 2014.
The first phase of the project is composed of the construction of a 130,000 cubic meter LNG storage tank, regasification facility, jetty and supporting infrastructure.
The second phase will include an additional 130,000 cubic meter LNG storage tank.
Rodriguez said Energy World will spend $150 million for the two-phase project.
The LNG hub will be complemented with a 150-megawatt (MW) natural gas power plant that will be ready in 2016.
The company entered into a deal with InterOil Corp. and Pacific LNG Operations Ltd. to establish an associated downstream gas sale, purchase, transmission and distribution service company.
“We are going to make sure we have a big supply of LNG in the Philippines,” said Energy World CEO and managing director Stewart Elliott.
“We want to develop LNG for power generation, city gas, vehicle fuel, cement plants and a lot of the industries that need gas,” Elliott said.
In January 2011, EWC received a 25-year permit for the development, construction and operation of the LNG terminal hub from the Department of Energy. The permit can be extended.
Rodriguez said LNG would be sourced from Australia, Indonesia or Papua New Guinea where it has its own natural gas field.
The construction of another 150 MW power plant will depend on energy demand, Rodriguez said, adding that the company will sell electricity to the wholesale spot market.
“We have no offtaker, we do not have a contract to sell to anyone, we will sell directly to the WESM.”
“We have our own gas field, we are not dependent on the people supplying us,” he said.
Energy World is also looking at putting up more LNG terminals in the country.
“We will have the main hub in Pagbilao, Quezon and also [build] other hubs so many of the islands will be able to get LNG easier,” Elliott said, adding that new LNG hubs can be put up in Visayas and Mindanao.
Given the low interest rates, Energy World is in talks with banks for other energy projects in the country.
“We want to go to Kanan hydropower [in Quezon] for 120-140 MW and also for a wind farm. Our target is 200 MW in General Nakar, Quezon,” Rodriguez said.
Rodriguez said the company can spend as much as $400 million for the hydropower project. To date, Energy World pays for the water rights in the project.
The energy firm will apply for a service contract in January next year, Rodriguez said.