THE PHILIPPINE

NATURAL GAS INDUSTRY

Jesus T. Tamang
Officer-in-Charge, Natural Gas Office
Department of Energy

Presentation Outline

Birth of the Industry

Development and Growth

Upstream Sector
Downstream Sector

Energy Sector Goals and Gas Policy Framework

Expanded Use of Natural Gas
Downstream Infrastructure

Prospects and Opportunities

Upstream
Downstream

Birth of the Industry

Birth of the Industry

Upstream Sector
San Antonio Gas
Field, 2.7 BCF

Malampaya Gas
Field, 3.7 TCF

Birth of the Industry

Upstream Sector
30 km

504 km
Up s tre a m

Gas dehydration
Gas dewpointing
Condens ate s tabilisation
Export compres sion

Catenary Anchored
Leg Mooring (CALM)
buoy for tanker
loading o f co ndensate

Do wn s tre a m
Sulphur Recovery
H2S removal
Metering
Supply bas e

Batangas

- 0m

Power
Stations

Alternative
Fuel

M a n il a

- 43 m
3rd flo wline
(2021)

Subs ea
manifold

Condens ate
storage

Condensate
export

24" Dry gas

pipeline

S an L o re n z o
S a n ta R it a

T a b a n g a o Re fin e ry
B a ta n g a s
Ilija n (N P C )

2 x 16 CRA wet gas

- 820 m

M alam p aya
P LA T FOR M

9 9Develo
pment wells
Development
wells
1 Contingency well

Camago-Malampaya Deep-Water Project

D raw. N o. : P97-1541

Birth of the Industry

Downstream Sector

SAN LORENZO POWER PLANT

First Gas Corp, 560 MW
Operating October 2002

ONSHORE GAS PLANT

SC 38 Consortium
Operating Oct 2001

STA. RITA POWER PLANT

First Gas Corp. 1,000 MW
Operating Jan 2002
ILIJAN POWER PLANT
KEILCO, 1200 MW
Operating June 2002

Birth of the Industry

Downstream Sector

PNOC CNG-Refilling Station and 3-MW Plant

Development and Growth

Development and Growth

Energy Sector Goals

Stable and secure energy supply

Wider access to energy supply

Fair and reasonable energy prices

Clean and efficient energy fuels and infrastructures

Enhanced consumer welfare and protection

Technology transfer and manpower development

Job creation from energy activities

Development and Growth

Gas Policy Framework
Policies
Promote natural gas as an
environment-friendly,
secure, stable and
economically efficient
source of energy
Promote competition by
liberalizing entry into the
industry and adopting procompetitive and fair trade
measures

Ensure compliance with

Philippine environmental
laws and regulations and
international safety
standards

Objectives
Competitive natural
gas prices vis--vis
other fuels
Increased utilization
of natural gas as fuel
in power and nonpower sectors
Increased share of
natural gas in the
energy mix
Adoption of state-of-theart technology, development
of experts and increased
employment
Enhanced economic
benefits to consumers

Development and Growth

Gas Policy Framework

Developments

Executive Order No. 66 designated DOE as lead

agency for development of Philippine natural gas
industry

Interim Rules and Regulations Governing the

Transmission, Distribution and Supply of Natural Gas
promulgated August 27, 2002 to provide basic
framework to guide investments and operations in
downstream gas industry

Development and Growth

Gas Policy Framework

Developments

Philippine Energy Plan provides framework for

development of the Natural Gas Industry along
with other energy sub-sectors

Natural Gas Policy and Regulatory Framework

embodies the policies, objectives, programs and
strategies for developing the Natural Gas Industry

Development and Growth

Gas Policy Framework

Structure

Downstream gas industry divided into

transmission, distribution and supply

Vertical integration/cross-ownership in
different industry segments allowed

Third Party Access to essential facilities

mandatory but deferment may be allowed
during initial years

Development and Growth

Gas Policy Framework
Entry

DOE to issue permits for construction, operation and maintenance

of pipelines and related facilities and for supply of natural gas

Congressional franchise for transmission and distribution

systems required except for own-use facilities

Pricing

Transmission, distribution and supply prices to be regulated in

markets without effective competition

Competition

Cartels/collusion prohibited per se, other anti-competitive conduct

as provided for in existing laws also prohibited

Development and Growth

Expanded Use of Natural Gas

Development and Growth

Primary Energy Mix Forecast, 2003-2012

MMBFOE
450

13.47%

400
350

0.69%
7.90%
3.98%
7.53%

0%
6.24%
3.90%
8.71%

300

6.10%
3.06%
5.76%
Others

23.82%

Hydro

27.43%

250

Geothermal

30.18%

NRE

200

40.65%
39.75%

100

12.47%

11.21%

7.12%

0
2003

2007

Oil
Coal

40.09%

150

50

Ngas

2012

Development and Growth

Power Forecast (Generation)

POWER GENERATION FORECAST

Total Philippines, In TWh
Base Case GDP Scenario
12 0
10 0
80
60
40
20
200 3

20 04

O il-B as e d

2 005

C oal

200 6

20 07

N at ural G as

2 008

H y dro

200 9

201 0

G eo th erm al

20 11

N RE

2 012

O t hers

Development and Growth

Power Forecast (Luzon Grid)

SUPPLY-DEMAND PROFILE (Existing & Committed)

In MW, Base Case GDP Scenario
18000
16000
14000
12000
10000
8000
6000
4000
2000

Existing
Additions Luzon

Com m itted
Peak

0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Development and Growth

Power Forecast (Capacity Additions)
MW
8000
7000

Load
Base MW)

ad
Base Lo )
(900 MW

6000
ange
Mid R W)

(300

ya
Mala W)

(600

Sucat 2

4000
3000
San Lorenzo
(560 MW)

1000

ange
Mid R MW)

(300 M

5000

2000

(600

y
Lima )
W
M
(620
1
Sucat )
W
M
(300

W)
(600 M

Sta. Rita
(1000 MW)
Ilijan
(1200 MW)

2002-2007

2008

2009

2010

2011

2012

Development and Growth

Gas Demand Forecast

Gas demand of existing facilities estimated to increase from 103

BCF (2003) to 198 BCF (2012) assuming 5.4% average annual GDP
growth rate (High Growth)

Additional gas demand expected

Power - Gas-fired power plants could fill new capacity requirements by

2008 including the conversion of 500 MW Sucat, 300 MW Malaya and
620 MW Limay plants
Transport - up to 1300 public transport vehicles running on CNG by
2003
Industrial - over 20 industrial parks located along Batangas-Metro
Manila corridor are potential industrial gas markets
Residential - natural gas can potentially replace LPG as cooking fuel

Development and Growth

LNG Importation Options

Additional gas demand to increase from 23 BCF in

2008 to 194 BCF in 2012 to meet demand for power
and non-power uses

Importation Options

LNG from Brunei, Indonesia or Malaysia

Piped gas thru possible pipeline interconnection with

the Trans-ASEAN Gas Pipeline (TAGP)

Development and Growth

LNG Importation Options

The Philippines sits in the middle of Asian LNG Trade

Development and Growth

Upstream Profile

Resource Class

Total Resources
Discovered Resources
Reserves
Potential Recoverable Resources

Undiscovered Resources
Hypothetical (Mapped) Resources
Speculative (Unmapped) Resource

Total
Million
bbl o. e.
(Mean)

8,895
973
836
137

7,922
2,848
5,074

Oil
Million
bbl
(Mean)

Gas

Condensate

Billion cf Million bbl

(Mean)
(Mean)

3,629 28,531
168 3,841
43
125

165
109

3,772
68

109
0

3,461 24,690

56

1,341
2,120

8,112
16,578

Source: DOE, Report of DOE-NORAD Phil. Petroleum Resources Assessment Project

As of January 2002

55
0

Development and Growth

Upstream Profile
Philippine Sedimentary Basins

Recent

studies
show
hydrocarbon
resource
potential
larger
than
previously projected

Petroleum resources found

in 16 sedimentary basins
representing an area of over
700,000 sq. km.

Development and Growth

Downstream Infrastructure
In Megawatts
8000
Base Load (600 MW)

7000

Base Load (900 MW)

MidRange (300 MW)

Capacity
Additions

6000

Pipeline

Malaya (600 MW)

MidRange (300 MW)

Pipeline

5000

4000

Ilijan (1200 MW)

Sta. Rita (1000 MW)
San Lorenzo (560 MW)

3000

2000

1000

Sucat 2 (600 MW)

Pipeline (MidRange)
and Sucat-Malaya (Malaya)

Sucat 1(300 MW)

Limay (620 MW)

BatMan 1

BatMan 1 (Sucat)
LNG Terminal/Batcave
(Limay)

Ilijan Pipeline
Sta. Rita-San Lorenzo
Pipelines

Transport
Infrastructure

0
2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Development and Growth

Downstream Infrastructure

Limay
620 MW (2008)
Conversion

Sucat
300 MW (2008)
600 MW (2009)

BATAAN
PENINSULA

Additional
Capacity
Requirement
in Luzon

Malaya
600 MW (2010)
Conversion

QUEZON CITY
MANILA

300 MW (2010)
1,200 MW (2011)
600 MW (2012)

Santa Rita
1000 MW (2002)
San Lorenzo
560 MW (2002)

TAAL LAKE

BATANGAS

Ilijan
1200 MW
(2002)

Development
and Growth
Downstream
Infrastructure

Development and Growth

Downstream Infrastructure

Proposed
Proposed Trans-ASEAN
Trans-ASEAN Gas
Gas Pipeline
Pipeline System,
System, TAGP
TAGP
CHINA
TAIWAN
MYANMAR

Gas Reserves Tcf

Existing or u/c Gas Pipeline
Proposed ASEAN Gas Grid

LAOS

THAILAND

VIETNAM

Bangkok

PHILIPPINES

South China Sea

CAMBODIA

250

500

Km

Luzon

3-4
Pacific Ocean
SABAH
Natuna
Sea

46
MALAYSIA
Minas / Duri
oil Fields

Singapore
Batam

6-8

28
SARAWAK
Samarinda

INDONESIA

Asamera Corridor
Blocks fields

Indian Ocean

BRUNEI
10

Surabaya
Jakarta

Prospects and Opportunities

Investment Opportunities

Upstream
25 TCF of natural gas in undiscovered
resources in 16 petroleum basins
Additional Gas Requirement
23 BCF in 2008 to 194 BCF in 2012

Investment Opportunities
Downstream
80-100-km Batangas - Manila Pipeline (Batman 1)
130-150-km Bataan - Manila Pipeline (Batman 2)
40-km Bataan-Cavite undersea pipeline (BatCave)
Spur lines such as the 35-km SucatMalaya pipeline
LNG Terminals in Bataan and Batangas
Conversion of thermal power plants to natural gas

Investment Opportunities
Downstream
Natural gas demand of 20 Industrial parks along
the pipeline route
Potential natural gas demand of large
commercial buildings and complexes in Metro
Manila area.
Refilling Stations in Metro Manila for Natural
Gas Vehicles
CNG Vehicles

Investment Opportunities
Year

Plant Capacity
(MW)

2002

Ilijan (1200)

Gas
Vehicle

(3)

Sta Rita (1000)

(3)

2011
2012

Pipeline

Limay (620)
Sucat 1 (300)
Sucat 2 (600)
Mid Range (300)
Malaya (600)
Base Load (900)
Mid Range (300)
Base Load (600)

(2)

LNG
Terminal

Refilling
Stations

- Ilijan

(1)

DEMAND
(in BCF)

0.07

OGP - First Gas

(3)

2009
2010

(1)

OGP

OGP - First Gas

San Lorenzo(560)
2003
2004
2005
2006
2007
2008

Transmission

117
155
195
235
390
545
700
855
1105
1355
Note:

Batman 1
Batman 2/BatCave
Batman 1
Batman 1
Batman 2
Sucat/Malaya
Batman 2
Batman 2
Batman 2

Bataan

3
3
4
4
4
5

103.24
222.47
348.47
485.47
630.47
822.47

Batangas

6
7

1,035.47
1,073.47

1,390.47

1,754.47

(1) On cumulative b asis

(2)

On-shore Gas Processing Plant

(3)

Existing

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www.doe.gov.ph