Shell to build 2nd Philippines' LNG facility in 2 to 3 years, then BG Group and Korea Western Power

Royal Dutch Shell aims to build the Philippines' first liquefied natural gas (LNG) import terminal in the next two to three years, as Asia's fastest-growing economy seeks to diversify its energy sources to meet robust demand.

The terminal will be a floating facility near Shell's Tabangao refinery in Batangas province, one of only two refineries in the Philippines.

"We could make a final investment decision within the next 12 months," Mr. Roger Bounds, Vice President Global LNG at Shell, said at a media briefing. He declined to give any figures for the investment or other details of the project.

Shell's new terminal would add the Philippines to a growing number of Southeast Asian nations, including Thailand, Indonesia, Malaysia and Singapore, who have come to the market in recent years, and will have to compete for supplies with larger, established LNG buyers like Japan.

Southeast Asia's LNG demand is expected to more than double to 20 million tonnes by the end of the decade from around 9 million tonnes in 2015, according to PFC Energy analysts.

A final decision for Shell to invest in the Philippines project would depend on regulatory approvals and off-take agreements that the company can sign.

Global trade in LNG will grow by nearly a third by 2018, with supplies from the United States and Australia reversing a shortage expected over the next two years, according to the International Energy Agency.

The Philippines, whose economy grew 7.8 per cent year-on-year in the first quarter, imports almost all of its fuel requirements. Several other companies, including BG Group and Korea Western Power, have also proposed LNG receiving terminals in the Philippines, but have yet to finalize development plans.

REUTERS / Today Online

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