Philippine authorities have given Excelerate Energy LP permission to proceed on plans to develop a floating natural gas import terminal to supply existing and new power generation.
Excelerate, headquartered in The Woodlands north of Houston, received a notice to proceed (NTP) from the Philippine Department of Energy (DOE) to develop Luzon LNG, which would be a floating liquefied natural gas (FLNG) terminal in the Bay of Batangas.
Excelerate’s Daniel Bustos, chief commercial officer, called the approval an “important milestone” that would support the country’s “long-term energy objectives.” The new infrastructure would allow the country “to continue on its current path of tremendous economic growth."
The project would supply gas to existing and new gas-fired power plants in the region that provide electricity to Luzon, including the area of Metro Manila. The gas supply would augment existing gas production from the country’s Malampaya fields.
The Malampaya gas fields in the South China Sea are nearing depletion, according to officials. The Royal Dutch Shell plc-operated fields supply three gas-fired plants, providing around 40-45% of power generation requirements for Luzon, the country’s main island. Luzon, including Manila, has an estimated population of more than 20 million people.
Luzon LNG would be designed, built and operated by Excelerate, which for years has fine-tuned its global FLNG development. For example, two years ago Excelerate struck agreements to construct and operate the first LNG import terminal in Bangladesh.
With the NTP, Excelerate said it now will seek the necessary permits and raise financing.
The proposed project would be offshore the city of Batangas to minimize the impact to the existing shipping traffic in the area and coastline. Excelerate technology would be used that is “specifically designed to perform in extreme weather conditions, like those of the Philippines, and has been proven at Excelerate's operations in the Gulf of Mexico, the North Atlantic, Israel, and most recently, the Bay of Bengal,” the company said.
The complex project, Bustos said, would not be Excelerate’s first and as such would be in a “unique position to offer the most industry experience to the Philippines to deliver a safe, efficient, and reliable project."
The Luzon LNG project may face some competition. In July, New Fortress Energy LLC reportedly held meetings with the Philippine DOE about an onshore LNG import terminal that would be integrated with a gas-fired power plant.