MANILA, Philippines – The liquefied natural gas (LNG) facility being planned by Pilipinas Shell Petroleum Corp. Philippines will be securing its supply from the floating storage and regasification facility in Australia which the multinational oil giant has pioneered and initially set on stream last year.
Shell Country chairman Edgar O. Chua indicated that Australia could be among the sources of the LNG supply that they will bring to the Philippine market.
Another option would be to tap into the Qatar gas project, which was undertaken by another subsidiary of Royal Dutch Shell in the Middle East region.
“There would be a lot of sources…Australia is one,” Chua said; adding that the feasibility study for the project’s implementation will be concluded next year.
While working on the project blueprint, Chua admitted that they are simultaneously in talks with prospective gas purchasers, such as power plant project developers and the industrial end-users and manufacturing firms at the special economic zones.
When asked about the cost impact of gas-fed power facility to the end-user, Chua indicated that gas should be seen as something that will underpin the diversification strategy in the country’s energy mix.
He stressed that the perpetual comparison to coal will give the latter an advantage in terms of cost, but gas can be seen as a “cleaner fuel alternative” for baseload generation.
Shell is expected to spend $1.0 billion for the LNG project and it is targeting to have it on stream around 2016.
Luzon grid in particular is badly in need of additional capacity. While many of the programmed projects are coal-fired plants, several of them are also impeded by “social acceptability” as well as permit-securing issues with their prospective host communities.
The additional gas plants are a welcome addition to the grid’s supply shoring-up, however, the issue on the pipeline construction must also be addressed judiciously by the government.source: mb.com.ph
