Local gas focus seen to offset imported LNG prices

PRIORITIZING indigenous gas could help mitigate the rising prices of imported liquefied natural gas (LNG), the Senate committee on energy chairperson said on Monday.

In a statement, Sen. Pilar Juliana “Pia” S. Cayetano, the sponsor of Senate Bill 2793, also known as the Philippine Natural Gas Industry Development Act, recommended prioritizing indigenous gas.

Citing data from the natural gas market, she said that Malampaya gas costs $12.8 per million British thermal units (MMBtu), compared to LNG, which costs $15.3 per MMBtu, inclusive of all regasification and other costs to generate power.

Sen. Sherwin T. Gatchalian earlier flagged certain provisions of the proposed law, one of which prioritizes indigenous gas over imported LNG. He said that this is “problematic” as consumers will be “forced” to pay higher electricity prices whenever indigenous gas is more expensive.

Citing industry sources, he said that the cost of LNG is $10.5 per MMBtu, which corresponds to a levelized cost of energy rate of P7.07 per kilowatt-hour.

Ms. Cayetano renewed her call to her colleagues to “take a patriotic stand” in favor of local natural gas resources by passing the proposed law.

“Let’s take a stand. Prioritize indigenous (natural gas). Support indigenous. And buy indigenous,” she earlier said.

“It ensures a continuous and stable energy supply in the country, even or despite unpredictable events occurring in the global market.”

Ms. Cayetano said that SB 2793 will incentivize the full exploration and development of the Philippines’ indigenous natural gas resources to address concerns about energy security.

She said the proposed law is key to revitalizing indigenous gas exploration, “which has been nearly abandoned because of the absence of clear-cut policies.”

“From 150 wells in the 1970s, there have been no additional drilling efforts since 2019. Are we going to let this industry die? Are we going to be dependent on imported natural gas?” she said. — Sheldeen Joy Talavera