Total plans to expand LNG business in Phl

MANILA, Philippines - Total S. A., the French integrated oil and gas giant, is looking at expanding its liquefied natural gas (LNG) business in the Philippines, a ranking visiting official said.

In an interview, Total LNG Origination director for Southeast Asia Anton Safronov said the French multinational firm is eyeing to supply LNG to the Philippines through a direct supply contract or through the development of a re-gasification terminal with a local partner.

He said the company is already in talks with two power companies to firm up the route it would take for its LNG business.

The entry of Total in the Philippines’ LNG business puts the French oil and gas giant in head-to-head competition with Royal Dutch Shell, which has already unveiled plans of putting an LNG terminal in Batangas.

Safronov said the final decision would depend on the planned LNG masterplan, which the Department of Energy is currently crafting and has committed to finish by the end of the year.

“What’s happening now is that the natural gas masterplan is supposed to be completed by the end of this year. That will give us more conclusion in terms of which potential party we go along with in order to supply LNG,” he said.

The first option is to directly supply LNG from Total’s global portfolio that includes Yemen, Nigeria, Qatar, US, Australia.

“We will be supplying directly to the off-taker,” he said. Total plans to supply LNG beginning in 2016.

He said this will give suppliers like Total enough time to help meet Luzon’s requirements by 2020.

“I think by 2020, Luzon should require something like two million tons per annum (mtpa) of LNG,” he said.

The second option is to partner with a local company that will build a re-gasification terminal.

“We are not developing (the terminal) ourselves but partnering. If you partner for a re-gas terminal, we will participate in building it just like we have done in India, and in Mexico,” Safronov said.

He said Total may have a clearer picture by the middle of next year when the LNG masterplan is out and when talks with potential partners have progressed significantly

“We will understand probably by the middle of next year whether we approach it as a supply opportunity or supply opportunity and re-gas,” he said.