Aboitiz, JERA bullish on LNG in Philippines

MANILA, Philippines — Aboitiz Power Corp. and partner JERA Co. Inc. of Japan are betting big on liquefied natural gas (LNG) to help the country’s energy sector transition toward low- and zero-carbon alternatives.

“For the Philippines, what we have in our pipeline is somewhere about 1,200 megawatts (MW) for Pagbilao. That’s targeting the Meralco competitive selection process somewhere around 2029 to 2030,” AboitizPower thermal business group chief operating officer Felino Bernardo said.

“We have to consider the power mix. Renewable is not going to do it alone. Coal-fired power plants cannot do it alone. LNG is our bridge for a lower cost, more sustainable source of electricity,” he said.

AboitizPower’s venture into the LNG space will be supported by JERA, the largest power generation company in Japan and one of the world’s largest buyers of LNG.

JERA’s Futtsu Power Station in Japan is considered one of the largest power stations in that country with a full lineup of combined-cycle power generation.

It also has an LNG terminal, which is one of the largest in Japan and receives approximately 11 million tons of LNG annually.

AboitizPower and JERA have earlier identified potential areas for collaboration across multiple fronts, including joint development of LNG-to-power projects, the fuel sourcing and management of LNG, potential participation in aspects of plant operation and management, and exploration of the use of new generation technologies.

“We are quite proud that we are one of the biggest LNG buyers, and we would like to utilize these experience and expertise together with Aboitiz to introduce LNG to the Philippines,” JERA executive officer and head of the Asia platform business group Shinsuke Nakayama said.

Nakayama sees LNG playing a very important role in the Philippines as a transition fuel in the short term.

“LNG-fired gas power plant emits half of carbon dioxide in comparison with coal-fired power plant so that will work as an important transition fuel from coal,” Nakayama said.

“Coal will play an important role, but by mixing LNG in the power generation portfolio, I think the Philippines will be able to go to decarbonization step by step,” he said.

With the construction of new coal-fired power plants expected to become more difficult moving forward, Nakayama said it is important for the Philippines to consider all available alternatives.

“Renewable alone will probably give you much higher electricity tariff. So if you compare it to current price of coal, there may be a little bit of increase, but what will give you the least increase, I think LNG is the great option for the Philippines,” he said.

The Department of Energy has considered LNG as an important source for fuel diversification.

The agency said the entry of LNG as a new type of fuel into the energy mix increases diversity and security of the country’s energy needs.

It is seen to provide the country with fuel and technology that allows flexibility in supporting the various grid demands from baseload to providing reliable mid-merit to peaking power supply.