State-run Philippine National Oil Co. (PNOC) is in talks with its Indonesian and Malaysian counterparts to support its planned self-generating industrial project (SGIP) in Tawi-Tawi and Dinagat islands, according to its top executive.
The SGIP project envisions an innovative industrial park powered by a microgrid combining liquefied natural gas (LNG) and renewable energy sources like solar photovoltaic (PV) systems.
PNOC president Oliver Butalid said during the Senate hearing Tuesday Indonesian state-owned oil and gas firm Pertamina and Malaysia’s Petronas could provide small-scale LNG once the project becomes successful.
“We intend to pilot this concept in two off-grid islands—Tawi-Tawi and Dinagat,” Butalid said, adding that 70 percent of industrial activities in the country is concentrated in provinces north and south of Metro Manila.
“That is where all industrial activities are, and that is also where land is very costly, labor is costly… So a place like Dinagat and Tawi Tawi are suitable for this project because we want to create baseload capacity 24/7 there using LNG modular generators. And in fact, we’ve had meetings already with both Petronas and Pertamina and willing to support this project by delivering small scale LNG if this project will proceed,” he said.
PNOC is seeking budget approval from the Senate for SGIP project amounting to P750 million.
The SGIP employs blended generation strategy which aims to significantly lower electricity costs for businesses within the industrial zone and serves as a proof-of-concept for integrating the energy transition into the Philippines industrial strategy.
The project is vital for areas with limited transmission capacity.
PNOC said that by showcasing how electricity costs could be reduced, the SGIP project would encourage industrial park developers in the Visayas and Mindanao where LNG is not currently available.
It said this would boost regional development and provide stable manufacturing jobs where grid supplied electricity is inadequate.
These SGIPs will use modular LNG generating units for base load power and solar and wind energy installations to supplement the demand.
