MANILA, Philippines - Global energy giant Shell is eyeing to build a liquefied natural gas (LNG) terminal in the Philippines with a capacity of up to 5,000 megawatts, more than the available capacities for the Luzon and Visayas grids combined.
“The terminal can power 5,000 MW,” said Edgar Chua, chairman of Shell Companies in the Philippines.
He said the terminal would be completed in phases, with the first as the floating storage and re-gasification facility.
First phase is floating storage and re-gas, because we can live with 1,500 MW to 2,000 MW and if this increases, build an on-shore facility, so it won’t be expensive and will be fast,” Chua said in a recent interview with reporters.
LNG is natural gas that has been converted into liquid form for ease of storage or transport.
He said the contract for the front-end engineering and design (FEED) for the planned LNG facility has already been awarded.
In July last year, Shell announced its decision to proceed to do the FEED for the terminal, which is envisioned to be a floating storage and regasification unit in the country.
However, Chua said the company is still waiting for the government’s fuel mix policy to see how LNG would fair in the whole equation of fuel use in the Philippines, along with coal and renewable energy.
“If you don’t have an energy mix policy, the default of (independent power producers) is to build a coal-fired plant….Commercial offtakers will only sign up if there’s a policy that guarantees that there is a market for power produced from LNG,” Chua said.
The Department of Energy (DOE) is currently working on a fuel mix policy, which it is expected to release soon.
Initially, the DOE is looking at a fuel mix that would have 30 percent natural gas/liquefied natural gas and 35 percent coal, with the rest in renewable energy.
Energy Secretary Carlos Jericho Petilla said the DOE hopes to release the full details of the fuel mix within the year.
He stressed that the mix is “non-firm,” which means it cannot be mandated in the Philippines as the power generator sector is market driven.
The fuel mix policy will also come amid the entry of LNG players in the country.
Aside from Shell, Lopez-led First Gen Corp. is also aiming to build the first LNG terminal in the country.