A Philippine energy supplier has placed an order for about 5.46 million cubic feet of liquefied natural gas (LNG) from Shell PLC for start-up activities.
Shell Eastern Trading Pte. Ltd., a unit of the British giant based in Singapore, will deliver the cargo contracted by First Gen Corp. (FGEN) in September, FGEN said this week in a filing with the Philippine Stock Exchange.
FGEN said its floating storage and regasification unit was successfully moored and secured last week at the company’s LNG import terminal in Batangas province, one of the first of seven terminal projects in Philippine LNG that was completed.
FGEN has four gas-fired power plants with a combined capacity of 2,017 megawatts, according to the company. The facilities depend on the Malampaya field, the only asset of only two commercial natural gas discoveries in the country, but the field has been depleting.
Production from Malampaya, off the coast of Palawan Island, 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 Department of Energy Philippines (DOE) published on February 15. Shell on November 1, 2022 announced the completion of the sale of its entire 45 percent operating stake to local company Prime Infrastructure Capital Inc.
To help bridge the fuel supply gap amid growing energy demand, the DOE has approved seven projects to build LNG import facilities. On June 2, he announced the completion of two of these, one of which is FGEN.
“The FGEN LNG terminal will accelerate the ability to bring LNG into the Philippines, to meet the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN’s subsidiaries,” FGEN said in the announcement of the Shell delivery. “FGEN believes that the FGEN LNG Terminal will play a critical role in ensuring the energy security of the Luzon and Philippines grid.”
On April 27 AG&P International Pte. Ltd., owner of the other completed terminal, announced the arrival of the Southeast Asian nation’s first LNG supply from abroad. Singapore-based AG&P signed a 15-year deal with Abu Dhabi National Oil Co in 2022. to supply LNG to the former, as announced by AG&P on February 23, 2022.
The initial charge was used to restart the Ilijan Combined Cycle Plant in Batangas province, the DOE said in its June 2 announcement. The 1,200 MW plant, owned by a Philippine subsidiary of Korea Electric Power Corp. and operated by Philippine conglomerate San Miguel Corp., ceased operations in June 2022 after Malampaya’s fuel supply was cut off.
The entry of LNG diversifies the Philippines’ energy mix, providing “flexibility” to meet demand, the DOE said.
The DOE projects an annual growth rate of peak energy demand of about seven percent from 2020 to 2040. To do this, the country of about 110 million people must increase installed capacity. increased by more than five times, going from 22,317 MW in 2019 to 114,601 MW in 2040. according to the agency’s “Energy Development Plan 2020-2040”.
Coal has long been the Philippines’ largest source of energy, 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. published on June 20, 2022. Contribution of natural gas that year. with 18,675 GWh it is ahead of oil with 1,616 GWh but behind renewables with 23,771 GWh.
However, the government has imposed a moratorium from October 2020 on issuing licenses for coal-fired power plants. In 2021, the government joined the COP26 global commitment to phase out coal power by the 2040s.
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