“Right now and the foreseeable future, natural gas and LNG is much cheaper today compared to two to three years ago, so there is a chance for the Philippines and for the countries in Asia to benefit from LNG and this is window of opportunity I think,” ADB chief of energy sector group Dr. Yongping Zhai said in an interview on Thursday.
Zhai believes that LNG, a cleaner gas compared to coal, could be “very much part” of the Philippines' energy mix depending on its viability.
He said the Philippines already operates a facility running on natural gas, and has been using it significantly.
The ADB has signed an agreement with state-run Philippine National Oil Company (PNOC) to act as transaction advisor for the Philippines’ first LNG hub project in Batangas.
The PNOC is developing a robust and sustainable gas supply strategy through the establishment of an LNG hub in Batangas given the imminent depletion of the Malampaya gas field's reserves.
Zhai said the Bank is providing advisory services to the Philippine government on the viability of importing LNG, how can this be utilized for power generation, and whether this is commercially viable.
“We are in the stage of assessing the (LNG project) offers from companies and we gather information from the country, what is the demand. We also assess the international market, what will be the price of LNG whether you buy long-term contract, short-term contract, (and buying in) spot market so what will be cost implication,” he said.
Zhai further said the Philippines can potentially become an LNG hub.
“You already have gas utilization because gas consumption is important here. To become a hub, you need to have internal consumption to anchor demand. And you have a geographic location that can reach from here to other places,” he added.