The Department of Energy said Thursday the country’s first two liquefied natural gas terminals which are expected to open this year will have no problem securing LNG despite the tight global supply forecasts.
“Supply is not a problem given the connections of both. It is the price of $20 per MMBtu [metric million British thermal unit] that will be of greater concern,” DOE’s Oil Industry Management Bureau director Rino Abad said.
Linseed Field Corp. and FGEN LNG Corp. are expected to complete their terminals in the first half.
Linseed is scheduled to commission its first integrated LNG import terminal in Barangay Ilijan in Batangas City in April in time for the arrival of San Miguel Corp.’s LNG supply for the 1,200-megawatt Ilijan combined cycle power plant.
FGEN LNG, a subsidiary of First Gen Corp., together with BW LNG which provides LNG storage and regasification services, is also set to commission its LNG facility in March, while the commercial operation is seen to start in June 2023.
Abad said SMC is securing supply from a global LNG supplier, while First Gen is teaming up with Tokyo Gas which has expertise and trade connections in the field.
He said the Japan-Korea market price for LNG of $20 per MMBtu is now a “relatively reasonable price”, compared to the September 2022 cost of $70 per MMBtu.
“Hence, it would be acceptable for both FGen and SPPC [South Premiere Power Corp.],” Abad said.
SPPC is owned by SMC Global Power Holdings Corp. which operates the Ilijan gas plant.
Abad made the statement following the release of the latest Global LNG Outlook by the Institute for Energy Economics and Financial Analysis which showed that global LNG supplies would likely to remain tight through 2025.
IEEFA, which analyzes LNG supply and demand developments in Europe, Asia, Australia, the U.S. and Qatar, said last year’s LNG market turmoil—characterized by record high prices and unreliable supplies—had undermined the long-term LNG demand growth in both Europe and Asia.