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Energy & Power Trade & Money

Decision on CNOOC-Phoenix proposal out in 2 weeks — DoE

The Department of Energy (DoE) said it would issue within the next two weeks the outcome of its evaluation of the proposal of businessman Dennis A. Uy and China National Offshore Oil Corp. (CNOOC), in a move that could result in the lone proponent so far of an integrated liquefied natural gas (LNG) import terminal receiving a “notice to proceed” with its project.

“Give me 10 days to study the proposal,” DoE Undersecretary Donato D. Marcos told reporters after the launch of the Philippine Conventional Energy Contracting Program on Thursday in Taguig City.

He said of the 23 entities that had held pre-application conference with the agency, only Mr. Uy through his company Phoenix Petroleum Philippines, Inc. and CNOOC had submitted a proposal with details on technical, financial and legal qualifications.

“What was requested was NTP, notice to proceed,” he said.

Mr. Marcos said the proposal would require an investment of between $1 billion and $2 billion for the LNG terminal, which excludes the capital outlay for a gas-fired power plant. The facilities are planned to be built in Batangas province.

He declined to disclose the capacity of the proposed power plant but he confirmed that it is at least 1,000 megawatts (MW).

The DoE official said one other company submitted a proposal, but only for a gas-fired power plant — Limay LNG Power Corp., which reportedly also has a Chinese partner.

He said the company previously said that it would trade LNG with Glencore PLC but that move would require an import facility for its own use.

“We don’t issue own-use permit,” Mr. Marcos said, adding that Limay LNG Power is now more keen on just dealing with the winning proponent. “They will talk to whoever wins and make a gas-supply agreement.”

The Phoenix Petroleum and CNOOC consortium has also gained an upper hand after state-led Philippine National Oil Co. (PNOC) announced that it had “postponed until further notice” its process of selecting a partner for its own LNG terminal project.

In a notice posted on its website dated Nov. 21, PNOC said it had postponed the pre-eligibility that was supposed to be on Dec. 4. It has also postponed the submission date of eligibility documents.

Mr. Marcos said he had learned “informally” from the agency’s top official Reuben S. Lista that the DoE’s corporate arm has “toned down” its project and might just invest with the proponent chosen by the DoE.

The DoE has been trying to encourage proponents of an LNG import terminal ahead of the expected depletion of the Malampaya gas-to-power project starting in 2024.

Five gas-fired power plants in Batangas province, with a combined capacity of 3,211 MW, are the main customers of the fuel source, which is expected to be depleted by 2022 to 2024. That capacity is close to a third of Luzon’s peak power demand.

Source: https://www.bworldonline.com/decision-on-cnooc-phoenix-proposal-out-in-2-weeks-doe/

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