UPDATE 1-Philippines' Phoenix gets green light for $2 bln LNG terminal

* Phoenix eyes commercial operations starting in 2023

* Phoenix partnering with CNOOC gas, power unit on project

* LNG terminal to have 2.2 mln T/yr capacity (Adds project cost estimate in headline and paragraphs 1 and 7)

MANILA, Jan 11 (Reuters) - Philippines firm Phoenix Petroleum said on Friday it has won government approval to build the nation’s first liquefied natural gas (LNG) import terminal for $2 billion, in partnership with China National Offshore Oil Corp (CNOOC).

Phoenix, a fuel retailer, said it plans to break ground this year for the LNG regasification and receiving terminal south of the capital Manila, in a country that still relies heavily on coal as a fuel source.

The company said its Tanglawan Philippine LNG Inc unit, which will undertake the project, is partnering with CNOOC Gas and Power Group Co Ltd, a unit of CNOOC and China’s largest LNG importer and terminal operator.

The LNG facility is expected to have a capacity of 2.2 million tonnes per year, with commercial operations targeted to start by 2023, Phoenix said in a regulatory filing.

The Philippines has been looking to start importing LNG to feed gas-fired power plants in Batangas, south of the capital, as domestic gas supplies from its Malampaya field are set to run out in 2024 at the earliest.

Phoenix, owned by local businessman Dennis Uy who helped bankroll Philippine President Rodrigo Duterte’s 2016 election campaign, also plans to build a 2,000-megawatt gas-fired power plant as part of the integrated project in Batangas province.

Raymond Zorilla, Phoenix vice-president for external affairs, said investments will reach $686 million for the regasification terminal and $1.3 billion for the power plant.

Dozens of domestic and foreign companies had expressed interest in the LNG project, but only three groups, including the Phoenix-CNOOC group, were short-listed. The other two were state-owned Philippine National Oil Company and power producer First Gen Corp with Tokyo Gas.

Whether the two other groups would be allowed to build their own facilities would depend on the viability of their project proposals, DOE Assistant Secretary Leonido Pulido told Reuters.

First Gen operates four power plants in Batangas with a combined capacity of about 2,000 MW, all running on Malampaya natural gas.

The Malampaya gas field, which lies near the disputed South China Sea waters and is operated by a unit of Royal Dutch Shell Plc, fuels plants that supply about 40 percent of the power for the main Luzon island. (Reporting by Enrico dela Cruz; Editing by Richard Pullin and Tom Hogue)