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Private sector to take lead role in building LNG infrastructure

THE Department of Energy (DoE) said it expects the private sector to take the lead in building out the country’s liquefied natural gas (LNG) infrastructure, including terminals to receive imports, and will back efforts to “encourage” private groups to engage in such projects.

DoE Head of Public Affairs Jive Bullock told BusinessWorld via Viber Wednesday that the infrastructure needs for LNG imports include jetties, storage, regasification terminals, onshore gas processing plants and pipelines.

She gave no details on how the government intends to “stimulate” private sector participation, which in the energy industry typically involves an incentive scheme for key projects. Executive Order No. 30 from 2017, for instance, authorizes streamlined approval procedures for a category of generating assets classified as Energy Projects of National Significance.

Ms. Bullock made the remarks on LNG to BusinessWorld Wednesday.

“The DoE agrees with Senator (Sherwin T.) Gatchalian. We cannot wait for Malampaya to run out before taking action, so we are really encouraging private sector participation and interest in developing the country’s LNG industry,” Ms. Bullock said.

Developing the country’s natural gas industry, according to her, would require the construction of LNG carrier jetties, storages, regasification terminals, onshore gas processing plants and pipelines.

Mr. Gatchalian, who chairs the Senate’s energy committee, had issued a statement that in light of the impending decline of the Malampaya gas field, the Philippines’ sole domestic source of gas, it was the DoE’s mission “to encourage the private sector to build receiving terminals for imported LNG.”

“Because we haven’t discovered new sources of gas in our country, we have to resort to importing LNG just to make sure that those 3,200-megawatt gas-fired power plants keep on running,” he said, referring to the five gas-run plants that account for 20% of the Luzon grid’s installed capacity.

On Jan. 5, Mr. Gatchalian, the DoE and the Energy Regulatory Commission (ERC) participated in a Senate hearing on the proposed Midstream Natural Gas Industry Development Act, or Senate Bill No. 1819.

The measure seeks to regulate the midstream natural gas industry, covering operations such as aggregation, supply, importation, receipt, unloading, loading, processing, storage, regasification, transmission and transportation of natural gas in original or liquified form.

During the hearing, representatives from the DoE and ERC asked for more time to submit their respective agencies’ detailed comments on the proposed bill.

DoE Assistant Secretary Leonido J. Pulido III and ERC officer-in-charge for the Investigation Enforcement Division for Generation Companies Leila O. Cirio both said that they would submit their formal comments on the bill by Monday. — Angelica Y. Yang

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