Philippines and fossil gas
After contracting 8.26% in 2020 due to COVID-19, Philippines GDP growth rate is forecasted to jump back to 7.41% for 2021 and to remain around 6.5% annually through 2025.
According to the Power Development Plan 2017-2040, peak electricity demand in the Philippines is projected to grow 5% annually and reach a total of 49,287 MW by 2040. A total of 43,765 MW of additional capacity must come on-line by 2040 in order to meet this demand.
Total electricity demand in 2017 was 94,370 GWh and total installed capacity was 22,730 MW. The plan projects total electricity demand to reach 230,000 GWh in 2040.
The Philippines Department of Energy is the regulatory body responsible for coordinating government policy and activities in the energy sector.
Natural Gas Demand
Total natural gas consumption in 2019 was 4.1 bcm.
Key Demand Drivers
As of 2020, more than 97 percent of all gas production is consumed by the power sector.
Industry use of natural gas is limited to supply for feedstock for the Shell refinery in Batangas.
In the transportation sector, there is currently no demand for natural gas. Between 2008-2014, a pilot program, that has since been discontinued, used natural gas to supply CNG to buses operating between Batangas and Manila.
Projection of Demand Growth
Under the "Clean Energy" scenario in the Philippines Energy Plan 2018 - 2040, released in August of 2020, natural gas demand increases by 4% in between 2018 and 2040. This is predominantly driven by commercial and transportation demand growth.
Since natural gas demand is driven by the power generation sector, the gas demand outlook is largely dependent on gas infrastructure development.
A 2020 OIES report forecasts gas demand reaching 7.5 bcm by 2030.
Natural Gas Supply
Gas production in the Philippines is entirely drawn from the Malampaya field, which started production in 2001. The Malampaya field is an offshore development, with a 500 km pipelines linking to Batangas, where the gas is then routed to three CCGT power plants, the 1200 MW Ilijan plant, 1000 MW Santa Rita plant, and 500 MW San Lorenzo plant. Total production from the Malampaya development is 3-4 bcm per year. Production levels from the Malampaya gas field are expected to decline starting in 2024. While the current production license expires in 2024, some production is expected to continue until around 2027.
Two newer gas plants which also use gas from Malampaya include the San Gabriel mid-merit and Avion peaking plant. The San Gabriel and Avion plants were built with the intention to switch to LNG once the Malampaya gas field is depleted.
Given the expected depletion of the Malampaya gas supply, the Philippines Department of Energy is aggressively planning to expand LNG investments to meet the country's energy demand.
Potential New Gas Sources
Philippines has no onshore reserves. However, there are offshore blocks that have yet to be explored in the South China Sea. Most energy companies have refrained from bidding on these blocks due to security risks associated with energy exploration close or within the South China Sea due to China's recent threats involving foreign exploration vessels.
In October 2020, Philippines National Oil Company (PNOC) announced that they were resuming oil and gas exploration in the South China Sea after suspending activities in 2014 due to rising tensions with China. PNOC was awarded Service Contract 57 which covers the Calamian oil and gas prospect, which may have natural gas reserves of about 2 trillion cubic feet. PNOC is hoping to start production from this discovery by 2027.
Current Gas Supply Projects
Proposed Gas Supply Projects
As shown in Table 1, there are a number of LNG developments in the Philippines.
Table 1: Proposed LNG Terminals in Philippines
|Project Name||Location||Capacity||Expected Commencement Date||Sponsor||Project Status||Main Users|
|Batangas FSRU||Batangas City, Southern Luzon Island||5 mtpa||3rd quarter 2022||First Gen. Corp, Tokyo Gas||Proposed, DoE Notice to Proceed granted||St. Maria & St. Joseph proposed power stations|
|Filipinas FSRU LNG Gateway Project||Offshore Batangas Bay||5 mtpa||2nd quarter 2022||U.S.-based Excelerate Energy LP||Under construction|
|Batangas Clean Energy LNG Terminal||Batangas City||3 mtpa||2025||Batangas Clean Energy Inc.||Proposed, DoE Notice to Proceed granted||proposed Batangas 1100 MW CCGT|
|Pagbilao Grande Island LNG Terminal||Pagbilao, Quezon Province||3 mtpa||2024||Australia-listed Energy World Corp.||Proposed, DoE Notice to Proceed granted||proposed 650 MW power plant|
Table 1: Proposed Gas Power Plants in Philippines
|Project Name||Location||Capacity||Expected Start||Sponsor||Project Details/Status|
|Saint Joseph Batangas Power Plant||Batangas||600 MW||2023||First Gen. Corp.|
|SMC LNG Power Plant||Batangas City||Phase I: 850 MW
|Phase I: 2023
Phase II: 2025
|Excellent Energy Resources|
|EW CCGT Power Plant||Brgy Ibabang Polo, Grande Island, Pagbilao Quezon province||650 MW||December 2022||Energy World||Near LNG receiving plant. Committed project according to Philippines DOE.|
|Natural Gas-Fired Power Plant||Pinamucan Ibaba, Batangas City||1100 MW||2025||Batangas Clean Energy||Will be alongside an LNG import terminal. Committed project according to Philippines DOE.|
|SMC Ilijan LNG Power Plant||Batangas||3600 MW||2024 (Phase 1)||SMC Global Power Holdings Corp.||3 phases, each one 1200 MW. Indicative project according to Philippines DOE.|
|Vires LNG-Fired Power Barge Project||Batangas Bay area, Batangas||500 MW||TBD||VIRES Energy Corporation||Indicative project according to Philippines DOE.|
|Santa Maria Power Plant ||Bantangas||600 MW||2023||First GenEcopower Solutions Inc.||Indicative project according to Philippines DOE.|
|Lucidem LNG Power Plant||Silanguin Bay, Zambales||300 MW||TBD||Lucidum Energy, Inc.||Indicative project according to Philippines DOE.|
|Lloyds Energy Philippines Inc. Floating Power Plant||San Pascual, Batangas Bay||1200 MW||2023||Lloyds Energy Philippines Inc.||Indicative project according to Philippines DOE.|
|First Gen EcoPower Solutions Inc. Santa Maria CC Power Plant||Batangas City||1260 MW||TBD||First Gen Ecopower Solutions Inc.||Indicative project according to Philippines DOE.|
|Argao Floating CCGT Power Plant||Brgy. Bulasa, Argao, Cebu||1238 MW||TBD||PHINMA Energy Corp.||Indicative project according to Philippines DOE.|
Projection of Gas Production
As of 2020, there is still much uncertainty about the gas production outlook. The Malampaya field is expected to decline in productivity until it reaches its depletion in early to mid-2020s. There are currently no plans for additional domestic production but exploration in the South China Sea could uncover additional natural gas reserves.
While there is much uncertainty surround LNG infrastructure developments, a 2020 OIES projection shows LNG imports meeting demand, reaching 5 bcm by 2040.
Articles and Resources
Related GEM.wiki articles
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- "Emerging Asia LNG Demand". Oxford Institute for Energy Studies. Retrieved 2021-01-11.
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- "Natural Gas Vehicle Program for Public Transport (NGVPPT)". Retrieved January 11, 2021.
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