MANILA (Reuters) - Australia-listed Energy World Corp expects to start up a gas-fired power plant in the Philippines by end-2018, its chief executive said, fed by the country’s first liquefied natural gas (LNG) imports.
The Philippines does not currently import LNG, but its domestic natural gas reserves are depleting, and the country has been developing plans for import terminals for years. EWC’s terminal on Pagbilao island in Quezon province, if started up this year, would mark the country’s first LNG imports.
“By the end of this year, we should have 400 megawatts (MW) in operation,” Energy World Corp (EWC) Managing Director and CEO Stewart Elliott told Reuters in an interview in Manila.
The generating capacity is part of a 650 MW power plant EWC is building in Quezon, located near its LNG receiving plant that is 90 percent complete, and will be capable of receiving 3 million tonnes of LNG a year, Elliott said.
The company will initially source the gas from the spot market and later possibly from its Sengkang gas field in Indonesia, Elliot said.
EWC has been developing the power plant and import terminal since 2011 but completion has been set back by several delays. Elliott said the project was now far enough advanced for EWC to have a tanker on stand-by in Singapore to bring in LNG once the facility is ready.
In a sign the project is close to start-up, the privately-owned National Grid Corporation of the Philippines (NGCP), in charge of running the country’s power grid, has issued a system impact study to Energy World that details how the plant’s entry would affect the grid and is “one of many requirements” before power stations go online, said an NGCP spokeswoman.
Power demand in the Philippines is rising fast along with its expanding economy, and imports of LNG are expected to rise rapidly as the nation’s natural gas reserves decline.
The Philippines plans to rely on imported LNG when its Malampaya gas field - in western Philippine waters - dries up in 2024. The field fuels around a fifth of the country’s power.
To meet future demand, Elliott said EWC was in early talks on another LNG receiving site in southern Mindanao island.
The government is already looking for partners to invest in a separate, $2 billion LNG facility to be built in Batangas province, also south of Manila where many of the current gas-fired power stations are located.
EWC has also expressed interest to invest in the Batangas LNG project.
Elliott is looking as well to spin off its Quezon LNG terminal and power station and list the assets on the Philippine Stock Exchange (PSE).
“The stock market is very actively talking to us, saying they’d like us to be listed and I would like it to be listed. I would prefer the end of this year but probably it will be next year,” he said.
EWC has made some inquiries and the exchange is waiting for it to take any listing initiative, PSE Chief Operating Officer Roel Refran told Reuters.
The company is also in discussions with local government officials for a 5-million-tonne LNG plant to be built in Sulu province, in southern Mindanao island, though the project is in early stages of development.
Elliott said there could also be potential for the Philippines to find new domestic gas reserves.
There are gas wells in Sulu province that have been shut in by earlier explorers looking for oil, Elliott said.
“There’s gas sitting there. I know one (concession holder) was planning to sell it to Malaysia but that would look stupid, wouldn’t it? Philippine gas being sold to Malaysia.”
(This story corrects to say Malampaya gas field in western Philippine waters, not eastern, in paragraph 10)
Reporting by Manolo Serapio Jr.; Editing by Tom Hogue