EWC Sengkang, page-5

Thanks ifandwhen.

Conclusions

Against the background described above, we see two potential paths forward for gas and LNG in the Philippines. There is clearly a possibility that in the absence of clear government policy support, it will not prove possible for private investors and financiers to justify an investment in an LNG import terminal. In this scenario, as Malampaya depletes and the existing contractual arrangements come to an end between 2022 and 2024, the existing gas-fired power plants will move from their current base load to peaking operation. Malampaya will continue to supply those plants for a few years until the end of field life, at which points the plants will either be decommissioned or run occasionally on liquid fuel.In a success case for LNG, at least one LNG import project will be completed. If the First Gen project is able to secure creditworthy power offtake arrangements, it would seem to have a reasonable chance of success, given its control of 2,000MW of power generation capacity. With the current structure of the power market, and the likely completion of significant coal and renewables capacity, the gas-fired power plants would most likely operate at a much lower load factor than has been the case under the current take or pay arrangements. Thus, the 3,000MW of power generation would be likely to require between 1 and 2 mtpa of LNG. Once an LNG receiving terminal is in operation, it is reasonably likely that additional gas demand, mainly for power generation, but also potentially for industrial or transport uses will emerge. It is reasonable to assume that 1,000 to 2,000MW of additional gas-fired power generation capacity may be constructed. Even in this success case, it is difficult to see that LNG demand in the Philippines would be higher than 5 mtpa by 2035.