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Philippine LNG Facility Draws 6 Foreign Bidders

September 20, 2018

While detailed requirements for it are still being drawn up, the state-run Philippine National Oil Co. (PNOC)’s proposed liquefied natural gas (LNG) facility has drawn strong interest from some of the biggest players in the business.

The project, which is going ahead as a solicited effort, is being worked in consultation with the Manila-based Asian Development Bank, a major regional multilateral bank serving all of Asia. Initial terms have been drafted and final requirements for bids should be in place by September. It will based in Batangas, the hub of the country’s existing natural gas power plants and which already have a capacity of 3,211 MW of output power. It is considered a critical part of the Philippines’ growing energy needs as its economy continues to be one of the hottest in Southeast Asia.

The estimated cost of the new LNG facility is around $600 million. It is less ambitious than the original version planned for the site. That plan had included building an additional 200 megawatt power plant on the same site, in addition to the LNG facilities.

As with many other projects of this magnitude, potential bidders usually take the time to visit to understand early requirements and to make their capability pitches early. The latest was the Dubai-based Lloyds Energy Group LLC, which spoke with PNOC President and Chief Executive Office Reuben S. Lista on September 12. Lloyds Energy had a formal meeting with the Philippine Department of Energy (DoE) last week. Both the DoE and PNOC have headquarters within the same grounds in Bonifacio Global City, Taguig.

Other companies which have previously made contact and expressed interest in the bids include:

  • From China:  China Petroleum and Chemical Corporation
  • From Japan:  Tokyo Boeki Machinery Ltd. and Mitsui O-S-K Lines
  • From Russia:  Gazprom
  • From the United States:  Bechtel Corporation

Lloyds Energy visited both to make a first contact and to provide PNOC and DoE representatives with their own idea of what might be possible to set up at the Batangas site. One of their proposals involves partnering with yet another Chinese company, China Kaicheng Energy Ltd., to design and set up a horizontally-integrated LNG hub which would include storage, liquefaction, regasification and distribution facilities. The Lloyds plan also proposes going ahead with a new power plant, despite the cutback in requirements from the PNOC, with a capacity of 200 to 800 MW.

Besides pitching their company and their ideas, Lloyds Energy’s team also took time to compliment the Philippine Team on its ideas for the project. As Lloyds Energy Executive Director Brett Wight said in a statement about the project, “We believe in the vision of the PNOC under the leadership of President Lista to invest not only in the development and construction of LNG facilities but also in the training of Filipino workers to improve their skills and abilities and contribute in the growth of the LNG industry in the Philippines”.

Lloyds hopes to work with PNOC and the DoE on multiple projects within the country. Besides its hoped-for win of the Batangas LNG facility bid, the company also plans to help develop other LNG and oil reserves facilities for the country, as well as to help training Filipino workers to support LNG installations in the Philippines and elsewhere around the world. That promise of training and more jobs just might be what it takes to tip the scales in Lloyds Energy’s favor if the final competitive bidding for this existing contract is close.