Energy Dept. eyes LNG master plan before 2013 ends

The Department of Energy is forging a master plan for liquefied natural gas (LNG) as part of efforts to

increase LNG share in the energy by importing and developing sources to eventually achieve energy sustainability.

The master plan is expected to be done before the year ends.

"We don’t have a robust master plan for energy... but we plan to update it. We’re actually coming up with an LNG master plan and we'll hopefully come up... before the end of the year," Energy Secretary Carlos Jericho Petilla said during the Platts Forum on Oil, Coal, and Biofuels at the Edsa Shangri-La on Tuesday.

"This is the right time to go into LNG. It is a good timing. As far as incentives are concerned, this is what we plan to come up with when we release the master plan," he added.

The year-end target for an LNG master plan takes into consideration what companies intend to do in the natural gas market.

"We have to consider the existing players. I know at least four players in LNG,” Petilla said. “We have to consider their existing plans because even with the absence of the master plan they already started," he added.

Petilla noted energy sustainability is "an issue in the Philippines," especially when the Malampaya deepwater gas-to-power project in offshore Palawan will be depleted by 2022.

The Malampaya project is operated by the consortium of Shell Philippines Exploration BV, Chevron Malampaya LLC and Philippine National Oil Co.-Exploration Corp.

"Malampaya gas project in Palawan provides about 50 percent of requirements of key power plants in Luzon. In 2011-2012, that mix has actually gone down," he said.

"That is why we are exploring... We are also exploring the importation of LNG and the development of more LNG sources in this country," he said.

As the economy expands, demand for energy also increases, the Energy chief noted.

"As of 2012, three energy sources—oil, coal and LNG—make up more than 50 percent of our vibrant energy mix and will continue to do so as we expand our industries," he said.

By 2030, the Energy Department targets to grow LNG share in the energy mix higher than that of oil and coal.

"The three energy sources will still have fair share in the energy mix by 2030, with natural gas to hopefully have a much bigger share," Petilla said.

Last month, Pilipinas Shell Petroleum Corp., the local unit of Royal Dutch Shell, said it plans to build a floating storage facility for LNG by 2017 if the government will make a regulatory framework for customers and build the Batangas-Manila (Bat-Man) 1 pipeline.

A customer being considered by Shell is the Batangas-Manila (Bat-Man) 1 pipeline, which will connect Malampaya’s existing Palawan-Batangas gas pipeline to Manila.

However, Petilla said the feasibility study for the 100-kilometer BatMan-1 pipeline is targeted in 2014. — VS, GMA News

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