Energy Secretary Alfonso Cusi said Wednesday he expects the groundbreaking of the first liquefied natural gas facility next year amid strong investor interest and increasing demand and supply.
“Asean [Association of Southeast Asian Nations] needs to start planning for this future. We need to think of how we can ride this LNG wave, to ensure that we can safeguard our energy security,” Cusi told participants of the 35th Asean Ministers on Energy Meeting.
Cusi said the Philippines would roll out the Batangas LNG terminal by 2020 to safeguard against the anticipated depletion of the Malampaya natural gas reserves by 2024.
“The buy-in is there. The investors are in. And we expect to commence groundbreaking of this project in 2018,” Cusi said.
He said investors could forge joint ventures with state-run Philippine National Oil Co. for the LNG project.
“We will come out with the regulatory framework on LNG. Starting October 10 will be the public consultation, discussion. We will have to and then after October 20, publication as a requirement for the administrative requirement,” Cusi said.
He said that aside from the Batangas terminal, other areas could also be used for LNG development such as Mindanao and Subic in Luzon.
The energy chief said while sustainable renewable energy was expected to dominate the future, there was still a need for a stable source of electricity that could bridge the transition.
“I would like to draw your attention to the second emerging trend that is changing our energy landscape”•the revolution in gas that promises to make it the bridging fuel in the short to medium-term,” Cusi said.
He said there was an increasing demand for gas in Asia, where players would eventually transition from net exporters to net importers.
Cusi said there was also an increasing gas supply from the rest of the world, especially from the United States. He said the lower cost of gas would further revolutionize the LNG industry.
“Due to the reconfigurations of these supply and demand mechanics, [it is] changing the way gas is purchased and pushing costs down in the process,” he said.
Cus said Asia had shown increased demand for gas. He said Chinese LNG imports alone jumped 38 percent this year.
“This thirst for gas is set to grow further,” he said, citing forecasts by British Petroleum that China and India would account for half of the 30-percent increase in global energy demand between today and 2035.
“The same trends are happening in Asean, where the situation is such that as gas fields continue to deplete. We will eventually transition from net exporters to net importers,” the official said.
He said that as gas demand continued to grow, supply was also expected to increase by 50 percent between 2014 and 2021.
“It is expected that Southeast Asian nations could soon double import capacity for liquefied natural gas as domestic energy sources fall short, collectively becoming a key player in the global LNG market,” he said.
Cusi said the region’s annual LNG receiving capacity was forecast to increase to 50 million tons from 25 million tons over the next five years.
