Vitol Group said on Monday that it had delivered the first cargo of liquefied natural gas (LNG) to Finland’s first LNG terminal and that another LNG shipment has embarked for the Philippines in what is also a first for the country from Southeast Asia.
The Finnish purchase had been made by Elenger Group and was completed on Sunday, the Rotterdam-based distributor said in a press release, noting that the buyer is “the largest privately owned energy company in the Finnish-Baltic region” . LNG from a Venture Global Calcasieu Pass LLC plant in the US state of Louisiana arrived on a Vitol tanker at Inkoo’s floating LNG facility, according to Vitol. He did not disclose the volume or sale value.
In the other purchase, Philippine company San Miguel Global Power will get the country’s “first cargo of LNG in mid-April this year and this cargo will be used to cool the floating storage unit (‘FSU’ ) Ish and put into operation the first LNG terminal. in Batangas Bay, Philippines, near Manila,” the announcement said without mentioning the volume or value of the transaction.
The supply from Abu Dhabi National Oil Company will power the 1,200-megawatt Ilijan power plant, whose LNG output is “expected to significantly increase the country’s net reliable power generation capacity in the face of rapidly increasing post-pandemic demand.” The cargo had been loaded at Das Island in the United Arab Emirates, Vitol said.
Energy security of the Baltics
Pablo Galante Escobar, head of Vitol’s LNG and European energy business, said the Inkoo hub “will improve energy security in Finland and the Baltic region, facilitating the flow of LNG from around the world to industry and European consumers”.
The Inkoo facility, about 37 miles from the Finnish capital Helsinki, began commercial operations in January, according to project owner Gasgrid, as the first LNG depot in a country that has no production of natural gas. It can supply not only Finland, but also Estonia, Latvia, Lithuania and Poland, Gasgrid said.
“The LNG terminal project is very important and historic for Finnish society as a whole. The LNG terminal vessel proved to be the fastest and most effective solution to break Finland’s dependence on Russian gas and to ensure the continuity of Finnish and Baltic gas supplies in various scenarios in the future,” Gasgrid wrote in a statement from press of March 3.
“This was the first time that a terminal vessel intended for the processing of liquefied natural gas was brought to Finland,” he added.
Elenger Finland CEO Pasi Näkki said in Vitol’s announcement: “As one of the few energy companies operating in the region, we buy gas directly from Western sources, which allows us to offer our customers more security and better prices, and has significantly increased our market share in Finland and the Baltic countries over the past year.”
“Until today we have used the port of Klaipeda in Lithuania to bring gas from the United States and Norway, now we begin to cooperate also with the Inkoo terminal and also with a new supplier in addition to our current partner Equinor of Norway – a global energy .Vitol company,” Näkki added.
Elenger Group said on Monday it has signed deals with LNG terminals to deliver 10 cargoes in the autumn, with three deliveries already made to Lithuania’s Klaipeda port in January and March. The remaining seven are for Inkoo, which is scheduled to arrive in the spring and summer.
Eyes on the Philippine market
The Philippines’ LNG importation comes amid depleting natural gas production in the country. The Philippines’ production has fallen steadily since 2019, from 155.49 billion standard cubic feet (Bscf) that year to 113.61 Bscf in 2022, according to an update from the country’s Department of Energy on Feb. 15.
Vitol Asia President Mike Muller said the delivery is “historic”, “this is an important milestone and we look forward to bringing in more LNG supplies from around the world to meet the Philippines’ growing gas demand”.
The Department of Energy has forecast an annual peak energy demand growth rate of seven percent between 2020 and 2040. To meet demand, the archipelago of more than 113 million people must increase installed capacity by more than five times from 22,317 megawatts in 2019 to 114,601 MW in 2040, according to the agency’s “Electricity Development Plan 2020-2040”.
Historically, coal has been the Philippines’ main energy resource, accounting for 62,052 gigawatt-hours (GWh) of the country’s gross power generation of 106,115 GWh in 2021, according to the latest available data from the Department of Energy. Natural gas, however, has also been a key player, contributing 18,675 GWh to the grid in 2021 ahead of oil at 1,616 GWh but behind renewables at 23,771 GWh.
Non-coal energy resources are expected to increase as the department has imposed a moratorium from October 2020 on issuing new licenses for coal plants in support of energy sustainability. In 2021, the government also joined the COP26 global commitment to phase out coal power by the 2040s. The Philippines, along with its top coal exporter Indonesia, signed a pact with the Asian Development Bank also in 2021 to finance the transition to clean energy.
In a nod to natural gas as an alternative, the Department of Energy has given the green light to the development of seven LNG terminals in the Philippines.
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