Gov't to draw up comprehensive plan for natural gas development

By Donnabelle L. Gatdula, The Philippine Star

Posted at Jan 20 2011 07:47 AM | Updated as of Jan 20 2011 03:47 PM

MANILA, Philippines - The Department of Energy (DOE) will draw up a comprehensive liquefied natural gas (LNG) program to help further spur the development of the natural gas industry in the country, a top energy official said. Energy Undersecretary Jay Layug said the DOE is crafting a national LNG program to outline the plan of action on the industry.

“We will build the infrastructure: the LNG pipeline, storage, re-gasification facility – all by the third quarter this year,” he said.

Layug said a number of proposals have been submitted by prospective investors to put up an LNG infrastructure, be it a pipeline or a terminal.

He said these investors are so eager to pour in capital into the LNG industry that they are willing to even forgo incentives from the government.

“In fact they are not asking for a government guarantee. They are saying they have the money, so let them build.”

Layug said over $1 billion in fresh investments into the LNG market could be generated from projects such as “the pipeline from Batangas to Manila, an LNG hub, storage and regasification facilities.

The DOE and the World Bank earlier said they are planning to work together to evaluate proposals for LNG projects in the country.

Energy Secretary Jose Rene Almendras said they are looking closely at LNG projects in Luzon and Mindanao.

The DOE said it may have to depend on LNG-fueled power generating facilities to avert a power shortage within the next two years.

US-based AES and Japanese firm Marubeni earlier committed to expand their power plants in the Philippines following a spate of power outages that hit the country at the start of 2010 due toinsufficient generating capacity.

The power companies’ additional supply, however, would not be able to meet the projected deficiency of 300 megawatts in 2011 and another 300 MW in 2012.

The DOE chief said as such, they initially saw the rehabilitation of existing power plants as the only stop-gap solution to avert a power crisis.

Three LNG proponents, however, have expressed interest to put up power plants that run on natural gas.