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AsiaElec GAS-FIRED GENERATION AsiaElec

Government approval

puts Philippine LNG

project back on track

PHILIPPINES THE Philippines is on track to begin importing invitation to tender for the FSRU once an ongo-
liquefied natural gas (LNG) before the end of ing non-binding process has been completed.
2022, following the government’s recent green BW Gas, GasLog LNG Services and Hoegh
light for work to begin on a floating storage and LNG Asia have expressed interest in providing
regasification unit (FSRU) based project. the vessel.
Philippine energy developer First Gen said The Philippines is counting on LNG to offset
on 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 Batan- field, Malampaya, will run dry by 2027.
gas 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
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 rationali-
our social quarantine measures on March 15 in sation to simplify and increase the resilience of
response to the coronavirus (COVID-19) pan- its business, Shell is exploring its options with a
demic, delaying project approvals. view to divesting its interest [in Malampaya],”
First Gen’s executive vice president and chief Reuters quoted an unnamed spokeswoman as
commercial officer, Jonathan Russell, thanked saying. “Shell would ensure a smooth transition
the government for issuing the permit despite of the asset to a credible buyer who would be well
the “difficult circumstances” created by the placed to optimise the value from Malampaya.”
pandemic. The divestment is part of Shell’s ongoing
The project, which represents the initial efforts to slash its oil and gas expenditure as it
phase of the terminal’s construction, involves focuses more on renewable energy and power
turning an existing liquid fuel jetty into a multi- markets, Reuters quoted unnamed sources as
purpose jetty as well as building an onshore gas saying. Shell announced on September 30 that it
receiving facility. The jetty’s conversion will allow intended to deliver $2.0-2.5bn in annual savings
it to receive large and small-scale LNG vessels in by 2022, which is in addition to the $3-4bn cost
addition to oil product tankers. cuts announced earlier this year.
The company wants to start construction by However, Philippine Energy Secretary
the fourth quarter and expects to be able to begin Alfonso Cusi said: “I’m not aware of who they
importing LNG by the third quarter of 2022. [Shell] are negotiating with. What I know is they
FGEN LNG intends to issue a binding are looking for a buyer.™

Week 40 07•October•2020 www. NEWSBASE .com P9