Regional LNG: Philippines mulls building LNG import terminal - Report

The Philippines is considering building a new import terminal for liquefied natural gas (LNG) in case a drive to find new local oil and natural gas fails, a senior Philippines energy official told Reuters on Thursday.

Three sites were being considered, one in Batangas south of Manila and two in the Bataan peninsula, Eduardo Manalac, undersecretary at the Philippines Department of Energy told reporters in London.

Neighbouring countries with large supplies of natural gas were already looking at the project, he said, without elaborating. Indonesia, Malaysia, Australia and Brunei are the region's big LNG producers

Philippines said earlier this year that BP, Qatar Liquefied Natural Gas Co Ltd and Japan's Marubeni Corp had also shown interest.

The Philippines is also offering 46 blocks to international companies as it seeks new energy supplies to feed rising domestic demand. Manalac is in London to promote the offering.

The country produces 260 million cubic feet per day of natural gas -- mainly in the giant Malampaya field -- but its crude oil output is just 600 barrels per day (bpd), forcing the country to import up to 300,000 bpd

"The Philippines has not been promoted very well. We've always been in the shadow of our long-time producing neighbours. If we don't find reserves we have to think of LNG importations," Manalac said.

The blocks contain 144 existing exploration, appraisal and development wells. Seismic data show they contain similar prospects to nearby fields in Indonesia, Brunei, Malaysia and Vietnam, he said.

Bids on the blocks must be submitted by March 2, 2004 and the winners will be announced in May.

Manalac said that 12-15 companies had expressed interest so far. "If we sign 4-5 contracts then I'll be very happy," he said.

Energy Secretary Vincent Perez said last month that U.S.-based companies Amerada Hess Corp, Occidental Petroleum Corp, Marathon Oil Corp and Hunt Oil Corp are interested in bidding.

Gas demand in the Philippines will rise over the next decade as the country switches oil-fired power plants to gas and promotes the use of gas-powered buses. The country aims to halve its oil imports over the next ten years.

The Philippines would even consider using the LNG import terminal to bring in natural gas supplies from its own deepwater fields, where pipelines are expensive to build.

"The market will be there," he said. "How you make it economic and bring it to market will be for the companies." (*)