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THE Philippine National Oil Company (PNOC) will be putting up the unclaimed areas in the Batangas liquefied natural gas (LNG) hub for bidding next year if it does not receive any offers that satisfy the government’s demands by year’s end.

PNOC technical adviser for the office of the president Arwin L. Ardon said during the 4th LNG supply, storage & transportation Philippines forum in Taguig City that the Department of Energy’s corporate arm has received 78 “unsolicited” offers for a joint venture, but only a small number are “serious.”

“By Dec. 31, 2017, if there are no [suitable] offers… we will be taking this into a bidding next year. There will be terms of reference next year if and only if there’s no offeror who has satisfied the JV (joint venture) guidelines,” he added.

Mr. Ardon also said the PNOC will have to bid out a contract for a third-party consultant, noting the “lack of competence among the people within the agency” to draft the guidelines for private companies to follow.

The decision to resort to an auction instead of an unsolicited proposal was due to a Department of Energy deadline to break ground by 2018.

Once the PNOC finds a partner, the first facilities to be set up will be a thousand-megawatt gas-fired power plant, a receiving terminal and an initial storage area.

Mr. Ardon said that the PNOC is also considering using the facility as an LNG trading center to take advantage of the country’s “strategic” location.

The Batangas LNG Hub, which will include storage, liquefaction, regasification, and distribution facilities, is located near a cluster of gas-fired plants currently supplied by the Malampaya field, which is expected to be depleted by 2024.

Mr. Ardon said the depletion of Malampaya dictates the timetable for the LNG hub.

Mr. Ardon said prices of LNG could fall when the domestic market expands, and the facility could also attract Filipino engineers with LNG experience overseas.

Reference:

Mogato, A. G. A. (November 10, 2017). Batangas LNG hub contracts to be put up for auction by 2018 — PNOC. Business World. Retrieved from http://bworldonline.com/batangas-lng-hub-contracts-put-auction-2018-pnoc/

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