Shell targets $1-B natural gas terminal up and running by 2016

MANILA, Philippines – Pilipinas Shell Petroleum Corp., the local arm of Royal Dutch Shell Plc., plans to put up a US$1 billion-worth liquified natural gas (LNG) Terminal in its Tabangao refinery and operate it by 2016.

“We believe this feasibility study for an LNG Terminal is a timely activity as it firmly supports the government’s thrust of achieving energy security and promoting cleaner energy. The feasibility study is expected to be completed by 2012 with a ‘first gas’ target date in 2016,” Edgar Chua, the company country chairman, told reporters on June 19.

This July, Shell signed a deal with the Philippine government to conduct a joint feasibility study for the planned facility in Batangas.

The study will determine the changes Shell must make so that the facility is inline with more strict regulations for gasoline and lower sulfur that will take effect in 2016 under the new Philippine National Standards (PNS) for ‘Euro IV (PH).’

“We are upgrading the facility to improve it and be able to meet the future and more stringent fuel specifications,” said Chua. 

He said the upgrade could possibly increase the production of white products, like liquified petroleum gas, unleaded gasoline and diesel.

Planned $1-B investment

Over the next 3 to 4 years, the company could spend as much as $1 billion–Shell’s biggest investment–to upgrade its Tabangao refinery and put up the LNG facility within the facility, said Chua.

“It’s a figure we’re looking at and the ongoing study will help determine the amount. We have a memorandum of understanding with the Philippine Government, as we will try to make that work together.”

“These were investments we looked at before but were held back. We are confident of the leadership now, as it provides good governance, level playing field and so on. The upgrade is not just hinged on demand, but more on having a conducive business environment,” he said.

The government, through the Department of Energy, is working on a Natural Gas Master Plan to diversify the country’s energy holdings and help meet demand for power to support economic growth. – Rappler.com