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LNG terminals seen to pose threat to PHL energy security

THE government’s approval of more terminals for imported liquefied natural gas (LNG) may have worsened the country’s looming power crisis, according to organizations focused on the energy sector.

“Taking a broader perspective will address the level of dependence we may be placing on LNG given its volatile fuel prices,” said Alberto R. Dalusung III, energy transition advisor of Manila-based policy group Institute for Climate and Sustainable Cities, in a Viber message.

Separately, Greenpeace campaigner Khevin Yu told BusinessWorld by phone over the weekend that the proposed LNG facilities require imported fuel, “posing another layer of problems in achieving energy security.”

Their comments come after the Department of Energy announced in January that Samat LNG Corp. had been given the notice to proceed with the construction of its small-scale LNG receiving terminal and regasification facility in Mariveles, Bataan. It is expected to start operations in 2024.

“It will only lock us down to these long-term contracts because it will require private energy companies to profit out of these projects, given that, there’s also a huge threat of volatile [prices],” Mr. Yu said.

LNG is being put forward as a solution to the country’s looming power crisis as the country’s only indigenous commercial source of natural gas — the Malampaya gas field — is expected to start depleting.

A report from Fitch Solutions Country Risk and Industry Research said the country might need to turn to the volatile spot market for LNG as the proponents of LNG terminal projects have yet to secure a long-term supply contract.

“The approval of more LNG projects amid high fuel costs and unsure import supply simply proves that there is a mismatch between our country’s energy development directions and energy security interests,” Gerry C. Arances, executive director of the Center for Energy, Ecology, and Development, said.

“LNG expansion means deepened reliance on imported fuels and vulnerability to global market volatilities. This is precisely why we have been raising alarm over the government’s promotion of LNG in the Philippines. All indicators tell us that LNG is not a solution to our power crises,” Mr. Arances added.

Samat LNG is the seventh receiving terminal to be cleared for construction in the Philippines after those proposed by Linseed Field Power Corp.; First Gen Corp.; Luzon LNG Terminal, Inc.; Energy World Gas Operations Philippines, Inc.; Shell Energy Philippines, Inc.; and Vires Energy Corp.

Linseed, an arm of Atlantic Gulf & Pacific Co., said that it had completed the conversion of a vessel into a floating storage unit for gas. The company is expected to start taking delivery of gas by March.

First Gen Corp., through its subsidiary FGEN LNG Corp., expects its LNG terminal to be completed by the first quarter of this year. — Ashley Erika O. Jose

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