South Korean gas and power company SK E&S has entered a letter of intent (LoI) with the Philippines Department of Energy to build liquefied natural gas (LNG) infrastructure worth $1.7bn in the country.
The company proposes to construct an LNG terminal with a capacity of up to five million tonnes a year and several LNG power plants of more than 600MW.
Other infrastructure to be built under the project includes a 150km-long pipeline connecting the terminal and power plants in Luzon Island in the north of the Philippines.
The proposal to set up the LNG infrastructure addresses the growing demand for LNG in the country.
The company noted that the gas reserves of the Malampaya offshore gas field, which serves as the sole supply source for the Philippines’ natural gas needs, are expected to be depleted by 2024 and there is a subsequent strong need for LNG imports, considering the rising demand for electricity.
According to the Department of Energy of the Philippines, power demand in the country is projected to grow at an annual rate of 5.6% by 2040, while LNG demand will grow 1.7% every year.
To meet the growing energy demand, the Philippine Government intends to complete necessary infrastructure by the end of 2023 for importing LNG.
The project proposed by SK E&S is expected to create 800,000 jobs a year during the construction.
An unnamed SK E&S spokesperson said: “We hope to have an opportunity to contribute to the development of the Philippines’ energy industry based on our vast experiences and technological prowess in the LNG business.”
The company expects to seal the project deal as the heads of the two governments met earlier this month to strengthen cooperation in the energy sector.
