INDONESIA's state-owned oil and natural gas company PT Pertamina (Persero) is keen on doing business in the Philippines, the Board of Investments (BoI) said in a statement on Monday, following an investment briefing on November 6 attended by Persero officials and those of subsidiaries PT Perusahaan Gas Negara (PGN) and PT Pertamina Petra Niaga (PPN) at the BoI office.
In the briefing, the BoI provided insights into the current Philippine investment landscape, citing opportunities in liquefied natural gas (LNG)-related projects to support growing demand.
"The company (Persero) has shared its plans to initially focus on midstream operations, which include the transportation and storage of LNG," the BoI said, adding Persero is also eyeing an expansion on upstream operations, including exploration, production, and distribution of the product.
Indonesia and the Philippines rank second and third, respectively, in terms of installed geothermal generation plants worldwide, according to the Department of Energy (DoE).
Both countries, highly dependent on coal-fired power plants, seek to transition to cleaner energy sources.
The visit of Indonesian officials was endorsed by the Philippine Trade and Investment Center in Jakarta, headed by Commercial Attaché Jeremiah Reyes.
Earlier this year, the Philippines and Indonesia signed a memorandum of understanding (MoU) to strengthen energy cooperation.
The MoU, signed by officials of the DoE and Indonesia's Ministry of Energy and Mineral Resources, stipulates cooperation between the two countries' respective business sector, particularly during periods of critical supply constraints on energy commodities such as coal and LNG.
The agreement also offers potential benefits across economic, environmental and geopolitical concerns through collaboration on energy transition, renewable energy, demand-side management, electric vehicles, and alternative fuels such as hydrogen, ammonia and biofuels.
The DoE said the Philippines has been a dependable market for Indonesian coal, accounting for nearly 98 percent share of total Philippine coal imports in 2022, consistently increasing from 88 percent in 2017.
However, the Indonesian government's coal export ban in January 2022 caused prices to spike and forced the Philippines to find alternative sources.
The Philippines imported more than 80 percent of its coal requirements in 2023, and more than 90 percent in previous years.
Crucial role
In a related development, Energy Secretary Raphael Lotilla on Monday cited LNG in the Philippines' transition to clean energy sources. Addressing stakeholders at the Norway-Philippines LNG Summit 2024, Lotilla said: "Today, LNG is stepping in to play a crucial role in our energy value chain. With two LNG terminals in Batangas Bay nearing full commercial operations, we are preparing to ensure the reliability of our gas-fired power plants."
He added: "We recognize the role of LNG as a transition fuel... It is a key element in our energy mix as we strive for a cleaner, more sustainable energy future and enhanced energy security through the diversification of fuels and sourcing from different countries."
The DoE said that once operational, the LNG terminals being built by Linseed Field Power Corp. and FGEN LNG Corp. will have a combined capacity of 8 million tons per annum to help provide a flexible solution to the country's growing power demand.
The facilities may also serve as a redundancy mechanism and offer an alternative fuel source for over 4,500 megawatts (MW) of gas-fired generation capacity by 2025.
Lotilla also announced that drilling for Malampaya's Phase 4 project starts next year to augment production output and extend the life of the natural gas power plant which supplies 20 percent of Luzon's electricity requirements.
He added the DoE is also working on a framework for the grant of special allowances to service contractors as incentives to further exploration and development of the country's petroleum resources.
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