The Philippines may soon rely on LNG import

The country has been sourcing gas from the local Malampaya gas field.

The Philippines could rely exclusively on imported liquified natural gas (LNG) as its domestic source in the Malampaya gas field is expected to run out of supply by 2024.

In a report, Fitch Solutions noted that the Philippines has been self-sufficient since Malaympaya started its production in 2022.

Despite lifting the moratorium on oil and gas activities in the west Philippine Sea in October 2020, the gas production outlook for the country remains “bleak.”

“The (Department of Energy) plans to spend PHP350.4b ($6.4b) for upstreaming explorations and is targeting to produce an additional 3.1 billion cubic metres (bcm) of gas, but it remains uncertain whether the Philippines will be able to see gas production in the near-to-medium term,” it said.

However, Fitch said the “relatively small” Philippine gas market is expected to grow from 2023 on the back of an increase in gas-fired power generation capacity.

There are only five operating gas-fired power plants in the country with a 3.45-gigawatt capacity, whilst 96% of the total gas consumption were from the power industry and the remaining 4% were from Shell’s Tabangao refinery.

“The city gas market in the Philippines is virtually non-existent. We expect upside risks to gas consumption in the near-to-medium term against the backdrop of planned LNG-fired power plants. However, long-term gas demand growth will depend on the government’s policies to promote investments in gas-fired power projects,” it said.

$1 = P55.16