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DOE Issues Certifications to Energy Projects
by Philippine Resources - November 10, 2020
The Department of Energy (DOE) has issued P37.553 billion Batangas Clean Energy Inc. project of billionaire Lucio Tan and its American firm partner Gen X Energy certifications as “energy project of national significance” or EPNS that entitles them to the streamlined process of permitting.
As an EPNS venture, the qualified projects are afforded a 30-day approval process on their permits as sanctioned under Executive Order No. 30 issued by President Rodrigo Duterte in 2017. In addition, DOE specified that the EPNS certifications for the Batangas Clean Energy LNG import facility and the proposed combined cycle power plant projects had been given separately.
The 3.0 mtpa onshore LNG import terminal will be sited close to the distilleries of the Tan group — Tanduay and Asia Brewery — at Pinamucan Ibaba in Batangas City. Once this project finishes in 2025, the LNG facility provides fuel to 1,100 megawatts of gas-fired power generating facilities that cater to the future energy needs of the distilleries, and the JG Summit petrochemical complex of the Gokongwei group in Batangas.
The company also eyes selling the capacity to Manila Electric Company (Meralco), the country’s biggest power distribution firm – and that could be concretized if the Tan-led LNG firm is joining the competitive selection process (CSP).
The floating storage regasification unit (FSRU) import facility of Texas-headquartered firm Excelerate Energy is another EPNS-certified LNG project, which is targeted to be the first player to bring LNG into the Philippines in the second quarter of 2022.
Furthermore, the project design of Excelerate Energy permits third party access (TPA) on its LNG import facility and caters to multiple buyers of gas.
Aside from these LNG facilities, the DOE also gave CEPNS to the Bacon-Manito geothermal expansion project of Energy Development Corporation (EDC) that has additional 49MW into its portfolio.
Energy Secretary Alfonso G. Cusi said, “We need to think of how we can ride this LNG wave, to ensure that we can safeguard our energy security. “We’ve started doing just that in the Philippines. We’ve started with the rollout of the Batangas LNG terminal by 2020 to safeguard against the anticipated depletion of the Malampaya gas facility by 2024.”
Philippine Resources - February 26, 2021
New Cebu Port Civil Works to Start Q2 2021
The civil works of the new Cebu international container port will start during the second half of 2021.This was revealed during the online 160th Maritime Forum of the Maritime League, Engr. Romel Pagarom, acting manager of CPA’s Planning and Monitoring Division, said that the groundbreaking of the NCICP is scheduled for August 16.The cost of the project is $118 million (roughly P5.9 billion) with around 35 months or approximately 3 years to build it, he said. But of course, there have been a few delays to the project. The National Economic and Development Authority (NEDA) in 2016 gave CPA, with the Department of Transportation (DOTr) as its lead implementing agency, the clearance to pursue the project. The construction of the project was supposed to start in 2018 but was pushed back to November 2020. Pagarom also added that they face several issues before proceeding with the civil works - Road-Right-Of-Way (RROW) acquisition which will connect the international port to the main road in Barangay Tayud (the MOA has already been drafted), and the need to work on the working visa of the South Korean consultants. Around P132 million is expected to be downloaded to Consolacion’s coffers if the agreement’s implementation would finally push through.“MOA was forwarded by Legal Service to the Office of the Secretary on January 20, 2021, for Sec. (Arthur) Tugade’s approval prior transfer of funds to the LGU of Consolacion. Thus, the PMU (Project Management Unit) will closely monitor the approval of the MOA and preparation of request for fund transfer of P132 million to LGU Consolacion,” said Pagarom.For the working visa of the consultants, project proponents will be sending out a reiteration letter to the Department of Foreign Affairs (DFA). Last January 20, 2020, DOTr issued the notice of award for the US$5.4-million consultancy services for the NCICP project to South Korea-based Yooshin Engineering Corporation.Some of the features of this new facility include a berthing facility with a 500-meter long quay wall that can host two 2,000 twenty-foot equivalent unit (TEU) vessels at the same time; operating facilities and structures for containers; a bridge and an access road; and a dredged waterway and turning basin.This will soon serve international cargoes and the current CIP will be transformed into a domestic port to address the decongestion problems.
Philippine Resources - November 03, 2020
SMC Plans to Build LNG Plant
San Miguel Corporation (SMC) has plans to build 2,550 megawatts of power facilities using imported liquefied natural gas to hit commercial operations in 2022. According to SMC President and Chief Operating Officer Ramon S. Ang, the project will be done in three stages at 850MW capacity each. The site is in Batangas, proximate to the existing 1,200MW Ilijan gas-fired power facility, and SMC Global Power Holdings Corporation is the subsidiary that advances this project to implementation. The plan is to offer its capacity in an exercise that power utility giant Manila Electric Company (Meralco) undertakes on its competitive selection process (CSP) for new power supply agreements. “The power generation group of San Miguel, we are now switching to LNG. We intend to build three lines of 850MW, so that’s 2,550MW,” Ang said. He added that the development blueprint is set for the targeted commercial operation date of the initial 850MW by 2022 - the timeframe when imported LNG begins to flow into the country. Ang said that SMC will have its own floating storage regasification unit (FSRU) to supply LNG to its own gas plants – and exploratory discussions with Batangas-headquartered engineering and gas firm AG&P are now being conducted. “All of that can be up and running in two years,” Ang said. “In 24 months, that plant will be up and running. Whether we win the Meralco bid or not, we will construct the first line of 850MW.” Ang said that the alternative off-takers could be the electric cooperatives, specifically those operating in the grids of Luzon and Visayas. According to him, the longer-term goal will double their capacity to 5,000MW, which can depend on the electricity demand gains. Ang also indicated that SMC is eyeing to replace their old coal plants with LNG-fed generating facilities, so that forced outages could be minimized.
Philippine Resources - January 12, 2021
Dept. of Energy: Moratorium on New Coal Power Plants
By Marcelle P. Villegas A moratorium on the endorsements of greenfield coal power plants was issued by the Department of Energy (DoE). This announcement was made while allowing foreign investors to now have full ownership of geothermal plant projects in the Philippines. DoE’s decision to stop the endorsements of coal power plants is the result of an assessment that showed the importance of focusing on a “more flexible” power supply mix. According to Energy Secretary Alfonso G. Cusi while at a virtual conference with world leaders held in Singapore, “This would help build a more sustainable power system that will be resilient in the face of structural changes in demand and will be flexible enough to accommodate the entry of new, cleaner and indigenous technological innovations.” DoE is currently updating their Philippine Energy Plan for the next 20 years. Mr Cusi mentioned that DoE is committed to accelerating the development of the Philippines’ resources while “pushing for the transition from fossil fuel-based technology utilization to cleaner energy sources to ensure more sustainable growth for the country.”  According to Undersecretary Felix William B. Fuentebella of DoE, the ban on endorsing new coal-fired power plants will not affect those power plants that have received endorsements in the past. He said, “We need to prepare for the influx of RE (renewable energy) under the recent policies issued by the DoE. Hence, the need for more flexibility.”  On note, 3,436 MV of committed coal-fired power projects in Luzon are ongoing as of August 2020. This includes the Meralco Powergen Corporation and GNPower Dinginin Ltd. Co. which is a joing venture of the Ayala and Aboitiz groups. Additionally, a 135 MW coal-run power projects in Visayas and 420 MV in Mindanao have been endorsed by DoE. Overall, there are around 10,000 MV indicative coal-fired power plant projects in the Philippines which may receive government endorsements. Mr Fuentebella said these will need to be sorted out. The ban will continue until the country will require additional baseload power, according to DoE official.  In relation to the ban, Center of Energy, Ecology and Development (CEED) pointed out that there are still environmental concerns about the existing coal-run power plants in the Philippines. CEED Director Gerard C. Arances said, “That is still concerning and alarming vis-à-vis pollution, climate imperative, and costly electricity in the country.” Another important announcement made by DoE is the upcoming open bidding round of renewable energy service contracts that will now allow foreign companies to own large-scale geothermal projects. This includes exploration, development and utilization. Last 20 October 2020, DoE released a circular providing the guidelines for the third Open and Competitive Selection Process (OCSP3) in the awarding of renewable project contracts. Cusi said, “From an investment perspective, OCSP3 allows for 100% foreign ownership in large-scale geothermal exploration, development and utilization projects.” DoE clarified that big geothermal projects are those with an initial investment cost of about $50 million and are under Financial and Technical Assistance Agreements, signed and approved by the Philippine President. Reference:  Ang, Adam J. (27 October 2020). Business World. “DoE bans new coal-run power plants”. Retrieved from - https://www.bworldonline.com/doe-bans-new-coal-run-power-plants/
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Philippine Resources - April 06, 2021
Philippines Unlikely to Fulfill China's Nickel Ore Requirements
Despite the resumption of many mining operations in the region, the Philippines is unlikely to fulfill China's nickel ore requirements, according to an S&P report. Philippine mined nickel production is expected to increase over the next five years, according to an S&P Global Market Intelligence industry survey, as producers aim to satisfy Chinese nickel ore demand. However, S&P analysts said, “We believe that legislation will remain a major hurdle for restarts and new projects, therefore the Philippines will be unable to meet Chinese nickel ore demand over our forecast period.” Three nickel mines in the world that had been closed due to the coronavirus disease in 2019 were reopened in 2020 when the government turned to the mining industry to help offset the economic effects of the disease (Covid-19). These restarts and demand from current mining facilities, according to foreign analysts, are expected to raise Philippine mined nickel output from 340,000 tonnes in 2020 to 550,000 tonnes in 2025. “However, we believe that existing environmental restrictions on Philippine mining will limit the scope for further mine restarts or additional production from new mining projects in the medium term,” S&P analysts said. “This will prevent the Philippines from meeting China’s nickel ore requirements in Indonesia’s absence, driving Chinese primary output down from an estimated 715,000 tonnes in 2020 to 490,000 tonnes in 2025.” The Philippine Nickel Industry Association (PNIA) previously reported that the country's nickel export value increased by P1 billion from January to September 2020, compared to P24 billion in the same timeframe last year. According to a survey from the Mines and Geosciences Bureau (MGB), the Philippine nickel industry produced 18.5 million dry metric tons (DMT) in 2020, down 14% from the previous year's 21.6 million DMT production. MGB stated that the lower output was primarily due to the increased community quarantine imposed by Covid-19 from March to May 2020, during which mineral product movement was restricted across the world. The increased performance in export value for the nickel industry, according to PNIA President Dante Bravo, was primarily motivated by demand increases in nickel prices. China's consistent demand boosted the world nickel price in 2020.
Philippine Resources - April 06, 2021
Forecasts for PH Development in 2021 Have Been Reduced
Fitch Solutions, a London-based think tank, has slashed its economic growth forecast for the Philippines this year, citing the return to tough lockdown measures in the wake of the COVID-19 outbreak, which is expected to dampen domestic investment in the short term. Fitch Solutions now expects the Philippines' actual gross domestic product (GDP) to rise by 5.8% this year, down from the initial estimate of 7.6%, due to the government's capital spending push being derailed. “The surge in COVID-19 cases in the Philippines in March and lockdown measures imposed reflect the continued risks to the archipelago’s economic outlook,” the think tank said in a research note dated April 1. The government has reimposed curfew policies in Metro Manila and neighbouring provinces, affecting an unprecedented 24 million inhabitants, as it struggles to control the pandemic. Given the continuing increase in cases and the long-term effect on hospital capacity, Fitch Solutions expects the lockout steps to be extended beyond two weeks. “The likelihood of further outbreaks in other regions remains high and given the slow vaccination rollout in the country (less than 1 per cent of the population has been vaccinated as of end-March) we believe the Philippines’ recovery will continue to be hampered by the pandemic,” Fitch Solutions said. Regional outlook The think tank went on to say that its new estimate of 5.8% also had downside risks. It stated that its forecast for a moderate recovery this year was based on the assumption that domestic demand would steadily improve and the government's investment plans would be realized, resulting in a sharp increase in domestic activity. “However, the slow vaccine rollout and recurrent difficulties in containing outbreaks look set to stall the recovery further,” it noted. A survey of economists in the Asean-5 and India found that the Philippines' growth projection was 5.2 per cent, down from 5.9 per cent in the previous poll last December. Although Asian countries that carried out mass vaccination earlier, such as India, Indonesia, and Singapore, saw their near-term economic prospects boost, gradual inoculation tempered economists' growth aspirations for the Philippines, according to a poll released on Monday by the think tank Japan Center for Economic Research (JCER). Economists following the Philippines predicted that GDP will contract by 3.8 per cent year on year in the first quarter, up from 0.7 per cent a year before. GDP will rise 8.4% year over year in the second quarter, 5.6 per cent in the third quarter, and 4.5 per cent in the fourth quarter due to base effects from last year's low. Malaysia and Thailand, including the Philippines, have weaker growth forecasts for 2021. “Most economists see the rollout of COVID-19 vaccination as one of the most significant positive developments over the last three months and all three upward-trending countries have rolled out vaccinations relatively sooner. This may have improved economists’ outlooks. Delays in vaccination and the spread of COVID-19 variants are listed as factors that might damage the economies,” JCER said. Top concerns Faster dissemination of COVID-19 variants and delayed vaccination, or "corona shock," were described as top economic issues in the Philippines, but higher inflation was also identified as a major threat to the country's recovery from the pandemic-induced recession. According to analysts, headline inflation will average 4.5 per cent in the first quarter, 4.8 per cent in the second, 4.7 per cent in the third, and 4.2 per cent in the fourth quarter, averaging 4.5 per cent in 2021, way above the target range of 2-4 per cent. With a 6.1 per cent increase, Singapore is forecast to lead economic growth in the Asean-5 this year, led by Malaysia's 5.3 per cent and Philippines' 5.2 per cent. According to the JCER report, India will rise at a higher rate of 11.2 per cent in 2021. Economists predicted that the Philippines' average GDP growth will be 6% in 2022, up from 5.8% in December but still below the government's goal.
Philippine Resources - April 06, 2021
Estrella-Pantaleon Bridge Expected to Open in June 2021
The Department of Public Works and Highways (DPWH) is concentrating not only on the civil work’s development of the Estrella-Pantaleon Bridge Project but also on keeping the workplace secure and clean. DPWH Secretary Mark A. Villar said, "that at 86 per cent and with just a few more days to fully complete the new Estrella-Pantaleon Bridge, we are mindful that a single case of COVID-19 in the project can lead to an interruption, if not total work stoppage" Secretary Villar recently issued revised guidelines in Department Order #30 for the implementation of ECQ, MECQ, GCQ, and MGCQ infrastructure projects, both public and private, during the public health crisis. "Although the bridge project is being rushed for completion in June 2021, it is critical that construction firms be proactive rather than reactive in dealing with the increased risk of illness from COVID-19," Secretary Villar added. Emil K. Sadain, Undersecretary for Unified Project Management Office (UPMO) Operations, and UPMO Roads Management Cluster 1 Project Manager Benjamin Bautista checked the physical progress of the bridge project on Monday, April 5, 2021, and the contractor's compliance with protocols that cover prevention, detection, and rapid response to maintain construction work continuity as workers who have been living in the barracks resume work after the Lenten season. “Let’s get to work healthy to get the job done”, Undersecretary Sadain reminded the contractor China Road and Bridge Corporation citing the current health situation, particularly in the NCR Plus bubble. In his report to Secretary Villar, Undersecretary Sadain reported that the project is more than 12% ahead of time, having completed all bridge substructure works for abutments A and B on both sides and piers of the Makati approach bridge; the V-shaped piers for the Main Bridge; concrete box girder for the approach bridge; and the V-shaped piers for the Main Bridg; and two (2) prestressed concrete box girder segments using the traditional approach. Post-tensioning and grouting works, formworks and rebar installation for the closure section in the side spans, formworks installation for the 2-meter closure section in the main bridge span, and preparatory works for approach road construction on both sides are now the focus of bridge construction activities. The new 506-linear meter bridge, funded by China and introduced by the DPWH UPMO - Roads Management Cluster 1 (Bilateral), would have a diameter of 21.65 meters, capable of four (4) lanes instead of two (2), and three-meter sidewalks on both sides. The P1.46 billion new Estrella-Pantaleon Bridge, which is scheduled to be completed in the second quarter of 2021, will handle 50,000 vehicles a day and minimize travel time between Mandaluyong and Makati to 12 minutes. The bridge will connect Estrella Street in Makati to Barangka Drive in Mandaluyong, helping to relieve traffic congestion on EDSA by providing an alternative route for motorists.