AG&P aims to commission the Philippines’ first liquefied natural gas (LNG) import terminal this December as part of the company’s strategy to operate five LNG regasification facilities across Asia by 2025.
The import facility being developed in the Philippines was scheduled to start operating in September, but commissioning has been delayed to December 2022, Karthik Sathyamoorthy, president, AG&P LNG Terminals & Logistics, told Energy Voice. “Like other mega projects, we had supply chain issues from China, due to the lockdowns. However, we are still very much on track for this year’s start,” he said.
AG&P, whose LNG business is headquartered in Singapore, is backed by several major shareholders, the largest being a Kuwaiti fund called Asiya, followed by Japan’s Osaka gas and Japan Bank for International Cooperation (JBIC). However, from an operational perspective, AG&P has over 8,000 employees in the Philippines and Manilla remains its largest operational location.
It is currently building a 3 million tonnes per year (t/y) capacity LNG import terminal in the Philippines that will eventually be expanded to handle 5 million t/y.
“The onshore site for the terminal is pretty much done and offshore jetty works are in the final stages. We should be finished by October. Then we can start testing and commissioning with actual commissioning in December,” said Sathyamoorthy.
“The capacity will be up to 5 million t/y. We have started construction for two onshore tanks that will be integrated as part of the main terminal in 2024. Until then the floating storage unit (FSU) acts as the only storage, during that period it will be a 3 million t/y terminal,” he added.
The Philippines, which is facing a looming gas supply crunch, as domestic production from Malampaya – the country’s sole field – is forecast to decline rapidly in the coming years, desperately needs LNG import capacity to improve its energy security.
The AG&P-led terminal is a tolling facility and the initial capacity will supply its anchor customer San Miguel Corporation that operates the 1200MW Ilijan power plant. San Miguel is also adding another 1200MW generation capacity. The combined 2400MW at peak would use almost all the 3 million t/y LNG terminal capacity, said Sathyamoorthy.
According to Sathyamoorthy, San Miguel has secured a short-term LNG supply contract and a medium-term contract from a portfolio player starting 2023. To make LNG more affordable for the Philippines, the import prices of LNG will be blended with the price of domestic gas.
The extra 2 million t/y terminal capacity will be used by AG&P to aggregate downstream demand from industrial, residential, transport and city-gas customers.
The terminal can be expanded further as the market evolves, both by adding additional storage and regasification capacity.