It has been reported by McKinsey Energy that out of the ~230mtpa of growth expected in global LNG between 2015-2030, as much as 60% could come from emerging markets. While the Philippines has faced challenges like many emerging economies when it comes to gas and LNG infrastructures, Canadain projects have faced similar altercations.
Interested to hear more about how Canada's LNG projects could learn from the upcoming LNG terminal in the Philippines, Gastech Insights spoke with Jose Aldon, Managing Director at AXI LNGAS and Executive Advisory Board Member for the Canada Gas and LNG Exhibition and Conference, taking place 14th-16th May in Vancouver.
Gastech Insights: First Gen Corp has recently made progress towards achieving FID for an LNG terminal in the Philippines. In your view, what can stakeholders and investors of Canadian projects do to drive and instil confidence?
Jose Aldon: As of yet, nobody has achieved any FID for the proposed LNG regasification terminal in the Philippines. FirstGen undertook a "corporate" (equity) financing for its two new gas plants (100 MW and 414 MW) for peaking and mid-merit operations initially, using the existing pipeline (Malampaya) gas. Thus, the country is also experiencing the same “birth pains” as most emerging LNG market in Asia trying to produce the “first LNG”. They still have to get the proper regulatory coverage and investment support from the Government.
The Government has issued some preliminary natural gas utilization rules last year, however, these still have to come with more strategic and comprehensive energy policies that will cover LNG importation and other fossil fuels as it caters specifically to the much-needed capital investment in its growing power/electric industry.
Gastech Insights: What key lessons can be learned from the Philippines and how can they be implemented in Canada’s upcoming projects?
Jose Aldon: The absence of a clear and transparent “LNG and/or Natural Gas” policy will keep on delaying the implementation of the gas projects and disincentivizes long-term investors both in the upstream and downstream sector of the country. The downstream sector is really the power /electric industry and thus, the entry of LNG to the country will be under its umbrella!
Gastech Insights: What are the factors enabling the growth of LNG demand?
Jose Aldon: Enabling the growth is the consumer demand, that requires cost-competitive, reliable, sustainable and environmentally friendly fossil fuels. These will help the country address its long-term power required to meet its high economic growth rates (more than 6% on the average). As of now, the country is one of the lowest users of energy per capita in Asia and needs approximately 43,000 MW of new generation capacities in the next 20 years. For sure coal which is the most dominant right now, will keep on leading the pack but realistically speaking, it cannot by itself respond to these new investment capacities. Coal is having its own issues and risks in delivering new power capacities whether technical, environmental and financial. Gas and renewables need to step up!
Gastech Insights: Why should industry players attend the Canada Gas and LNG Exhibition and Conference in May?
Jose Aldon: Attendees of the event in Vancouver this May can benefit from the sharing of experiences (negative and positive) and unparalleled industry expertise. As well as this they can discover the need to find positive collaboration and connection with other industry players in the total LNG value chain, from upstream producers and midstream facilities owner/operators to the downstream sector at the consumer points in Asia (which is focused more on power generation).
The Canada Gas and LNG Exhibition and Conference provides the opportunity to connect with key gas players and hear more about the evolving developments within Canada's gas and LNG industry. Register for your delegate place now to attend the event on the 14th-16th May!
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