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GLNG ASIA GLNG

Government approval puts Philippine

LNG project back on track

PROJECTS & THE Philippines is on track to begin importing invitation to tender for the FSRU once an ongo-
COMPANIES LNG before the end of 2022, following the gov- ing non-binding process has been completed.
ernment’s recent green light for work to begin on BW Gas, GasLog LNG Services and Hoegh
a floating storage and regasification unit (FSRU) LNG Asia have expressed interest in providing
based project. the vessel.
Philippine energy developer First Gen said on The Philippines is counting on LNG to offset
September 24 that the Department of Energy a decline in domestic gas production, with the
(DoE) had approved subsidiary FGEN LNG’s DoE projecting that the country’s largest gas
plans to build interim import capacity in Bat- field, Malampaya, will run dry by 2027.
angas Province.
The energy company said FGEN LNG had Strategic divestment
received a permit to construct, expand, rehabil- In related news, Royal Dutch Shell announced
itate and modify (PCERM) existing facilities at on September 24 that it was looking to sell its
the First Gen Clean Energy Complex in Batan- 45% stake in Malampaya, which supplies feed-
gas City. stock for four power plants on the country’s main
FGEN LNG originally applied for the permit island of Luzon. These TPPs deliver around a FGEN LNG intends
on March 4, with a view to beginning building fifth of the country’s power requirements.
in May. However, the government began rolling “As part of an ongoing portfolio rationalisa- to issue a binding
our social quarantine measures on March 15 in tion to simplify and increase the resilience of
response to the coronavirus (COVID-19) pan- its business, Shell is exploring its options with invitation to
demic, delaying project approvals. a view to divesting its interest [in Malampaya],”
First Gen’s executive vice president and chief Reuters quoted an unnamed spokeswoman as tender for the
commercial officer, Jonathan Russell, thanked saying. “Shell would ensure a smooth transi- FSRU once an
the government for issuing the permit despite tion of the asset to a credible buyer who would
the “difficult circumstances” created by the be well placed to optimise the value from ongoing non-
pandemic. Malampaya.”
The project, which represents the initial phase The divestment is part of Shell’s ongoing binding process
of the terminal’s construction, involves turning efforts to slash its oil and gas expenditure as it
an existing liquid fuel jetty into a multipurpose focuses more on renewable energy and power has been
jetty as well as building an onshore gas receiv- markets, Reuters quoted unnamed sources as completed.
ing facility. The jetty’s conversion will allow it saying. Shell announced on September 30 that it
to receive large and small-scale LNG vessels in intended to deliver $2.0-2.5bn in annual savings
addition to oil product tankers. by 2022, which is in addition to the $3-4bn cost
The company wants to start construction cuts announced earlier this year.
by the fourth quarter and expects to be able to However, Philippine Energy Secretary
begin importing LNG by the third quarter of Alfonso Cusi said: “I’m not aware of who they
2022. [Shell] are negotiating with. What I know is they
FGEN LNG intends to issue a binding are looking for a buyer.™

P14 www. NEWSBASE .com Week 39 02•October•2020