THE United States-listed New Fortress Energy LLC (NFE) will be screening for investment opportunities in the country for future liquified natural gas (LNG) projects.
On late Wednesday, the state-owned Philippine National Oil Co. (PNOC) and New Fortress signed a memorandum of understanding centered on developing the Philippine LNG industry.
“NFE can help us bridge the gaps in the value chain for a robust LNG industry and enable us [to] take that giant leap towards the realization of the Philippines’ potential as a strategic LNG hub for the Asia-Pacific region,” PNOC President Reuben S. Lista said in a statement on Thursday.
Founded in 2014, New Fortress is a global energy infrastructure company that specializes in the construction and operation of LNG import terminals and other related facilities.
The government is rushing to promote the country to both local and foreign investors who can help in raising its LNG capacity amid the depleting reserves in its sole natural gas field in Malampaya, posing a threat to energy security.
Recently, it published its LNG investors’ guide for those interested in tapping the country’s indigenous gas resources.
“We hope that this partnership would bear fruit that would redound to the advantage of our people,” said Energy Secretary Alfonso G. Cusi, who is also present at the virtual signing as PNOC’s ex-officio board chairman.
“We are confident that, with this cooperation with New Fortress Energy, PNOC will find meaningful ways to contribute to achieving energy security and stability in the country,” Mr. Lista said.
New Fortress Chairman and Chief Executive Officer Wes Edens said the deal would enable “cleaner, more affordable, and more reliable energy for the people of the Philippines.”
“Increasing access to power across the islands at a rapid pace will create significant growth opportunities,” he added.
The Malampaya gas-to-power project under Service Contract 38 supplied 3,200 megawatts of electricity, accounting for 21.1% of the country’s gross power generation in 2019. The Department of Energy (DoE) projects that its resources will be gone by 2027.
Aside from vetting for prospective LNG spots around the country, the government also targets the importation of LNG as the alternative to the Malampaya reserves.
So far, it signed off LNG terminal projects forwarded by the Lucio Tan group with Blackstone group’s affiliate Gen X Energy, First Gen Corp. with Tokyo Gas Co. Ltd., US-based Excelerate Energy, and Energy World Gas Operations Philippines, Inc.
Among the four groups, Lopez-led First Gen is poised to deliver imported natural gas as early as 2022 with the construction of its interim gas terminal starting the last quarter of this year. It was given the go-signal by the DoE last month to proceed with the construction of its project.
PNOC was already in the process to pick a contractor for its LNG terminal when it decided to shelve the project in 2018 to give way to private players to build their own gas facilities. — Adam J. Ang