Shell open to partnerships for planned LNG terminal

MANILA, Philippines – The local unit of energy giant Royal Dutch Shell is open to partnerships to bring its planned liquefied natural gas (LNG) terminal into fruition before the Malampaya deep water gas-to-power project is depleted, its ranking official said yesterday.

In a briefing yesterday, outgoing Shell country chairman and president Edgar Chua said the group is keen on developing an LNG facility in the country as it sets up a new company for the LNG business.

LNG is natural gas that has been converted into liquid for ease of storage or transport.

“We’re looking at putting up a company that’s going to invest in LNG import facility, LNG business,” he said.

“It is something we’re very much interested in because we believe LNG provides a very good, clean alternative as far as fuel for the future is concerned,” Chua said.

Based on its study, Shell can build a land-based or floating storage regassification unit (FSRU) LNG terminal.

But it was announced earlier this year by Shell Philippines Exploration B.V. managing director Sebastian Quinones that the group has decided to put up a floating storage regassification unit at the Batangas Bay area.

Chua said the size of the LNG facility will be hinged on the existing market while investment cost will depend on the partners it will have in the project.

“Shell is quite flexible in all of this things. We’re not looking at doing by ourselves, it can be something in partnership with one or more partners that’s why I cannot give you a fixed amount,” he said.

As supply from the Malampaya deep water gas-to-power project is seen to run out by 2024, building an LNG import terminal would help bridge the need until another gas field is discovered and developed.

Malampaya currently supplies the LNG needs of three major gas-fired power plants in Luzon with a combined capacity of 2,700 megawatts (MW), namely the Sta. Rita and San Lorenzo gas plants of the Lopez Group and Ilijan plant under San Miguel Group. This is equivalent to 40 percent of the Luzon grid’s requirements.

It also supplies to the 100-MW Avion plant and the 414-MW San Gabriel plant — also of the Lopez Group — which started operating this year.