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Wednesday, July 30, 2014

Meralco mulls conversion of Atimonan natural gas project to coal

Meralco PowerGen Corp is mulling the conversion of the company's liquefied natural gas project in Quezon to a coal-fired power facility.

Angelito U. Lantin, Meralco PowerGen Corp senior vice president and general manager, told that the company is now undertaking studies for the construction of a coal plant instead of a 1,500-megawatt (MW) LNG-fired facility in partnership with Japanese firm Chubu Electric Power Corp.

The latter said that the decision was brought about by the lack of government policy support for the nascent LNG industry.

"We are studying the site for a coal plant now. Kasi yung LNG as we have explained before --power produced from an LNG plant is more expensive than from coal. So we need the government's policy [or] if the government will support, for example, a higher price for LNG as an option to coal," he said.

Government has been trumpeting the development of the LNG industry to help secure the country's future power needs and electricity rates, especially with the Malampaya natural gas field in offshore Palawan projected to be depleted by 2024.

However, Energy Secretary Carlos Jericho L. Petilla earlier said that while LNG is less costly than coal in other markets, it is still more expensive to bring into the country because of logistics costs.

LNG prices in the international market have also been on an upswing due to growing demand worldwide and a recent US policy aimed at cutting carbon emissions from coal plants.

To ensure that the industry will take off, the government and the World Bank are currently laying down a natural gas master plan that will outline the needed regulatory and policy framework.

Phases 1 and 2 of the plan will be on the establishment of an investment and transactional framework, which the DOE and its advisers are nearing completion of. The phase 3 will involve the creation of a natural gas master plan for the longer term.

"Pero wala pa yun (master plan) eh, we cannot wait because the country needs more power. So we are studying it," Lantin said. "Maybe by end of the year meron na kami idea pano kami mag proceed. It depends on what the government's policy on LNG. So they're doing some studies and coming up with an LNG master plan pero hinihintay pa namin. "

The Luzon grid is projected to be short of 200 MW for the summer months next year due to regulatory and technical delays in the construction of power plants.

- Interaksyon

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