LNGPH, a consortium of Meralco PowerGen Corp. (MGEN), Aboitiz Power Corp. (AboitizPower), and San Miguel Global Power Holdings Corp. (SMGP), is considering building a P6-billion onshore liquefied natural gas (LNG) storage tank in Batangas as it looks to reduce its reliance on floating storage facilities.
LNGPH President and Chief Executive Officer Yari A. Miralao said the proposed third tank would have a storage capacity of up to 180,000 cubic meters, equivalent to about 18 days’ worth of gas supply.
“We’re now in this contemplative period, and the thought process now to start moving tanks onshore because that’s a more natural solution as opposed to these FSRUs (floating storage and regasification units),” Mr. Miralao told reporters on the sidelines of the 26th ASEAN Energy Business Forum on Oct. 8.
Construction of the proposed tank would take an estimated 36 to 42 months, he said.
The proposed expansion follows the commissioning of LNGPH’s two onshore storage tanks in Batangas last month.
Each tank has a capacity of 60,000 cubic meters, bringing their combined capacity to 120,000 cubic meters, equivalent to about 11 days’ worth of gas consumption, according to the consortium.
LNGPH also charters a floating storage unit with a capacity of 135,000 cubic meters from the United Arab Emirates’ state-owned Abu Dhabi National Oil Co. (ADNOC).
Mr. Miralao said onshore storage would reduce the consortium’s dependence on vessels for LNG storage.
“Conceptually, LNG should be stored in onshore tanks for resilience. You don’t store it on a ship, especially if natural gas accounts for 20% to 40% of the Luzon grid’s power supply and you’re relying on a vessel connected to marine loading arms for all that power,” he said.
“A more resilient grid should have its tanks onshore,” he said.
The facilities store imported LNG before it is converted back into gas through regasification equipment and transported by pipeline to power plants for electricity generation.
The proposed tank would add to the consortium’s existing LNG infrastructure in Batangas, which forms part of a $3.3-billion investment agreement reached by MGEN, AboitizPower, and SMGP early last year.
The transaction covers the Ilijan gas-fired power assets with a combined installed capacity of more than 2,500 megawatts (MW), as well as the LNG import and regasification terminal in Batangas.
LNGPH’s unit, Excellent Energy Resources, Inc. (EERI), is also preparing to participate in the government’s first mid-merit natural gas capacity auction, with three projects in Batangas and the Visayas.
EERI is among the 10 prequalified bidders for the auction, through which the Department of Energy is seeking to procure more than 3,800 MW of capacity. — Sheldeen Joy Talavera