South Korea’s SK E&S, part of conglomerate SK Group, said it signed a letter of intent on Tuesday with the Department of Energy of the Philippines to propose the construction of LNG infrastructure worth $1.7 billion in the archipelagic country.
SK E&S presented a blueprint to the Philippines government for the construction of a LNG import terminal with the capacity of up to five million tonnes per year.
The proposal also includes several LNG power plants of more than 600 MW, and an up to 150 km long pipeline connecting the terminal and power plants in Luzon Island, north of the Philippines, according to a statement by SK E&S released on Thursday.
SK E&S said that it suggested the development of large-scale LNG infrastructure based on its expectation that the Philippines would need to build the infrastructure in response to a growing demand for LNG.
The Philippines has entirely relied on the Malampaya offshore gas field as its only supply source for natural gas.
However, the Malampaya gas reserves are expected to be depleted by 2024 and the growing demand for electricity to fuel economic growth underscores the strong needs for LNG imports, the company said in its statement.
The Department of Energy of the Philippines forecasts that the country’s power demand will grow by an annual rate of 5.6% by 2040, while the demand for LNG will experience an annual growth rate of 1.7%, mainly from gas power plants along with its economic growth.
Thus, the Philippines government has been reviewing measures to complete LNG infrastructure by the end of 2023 to import LNG, the statement said.
In the meantime, SK E&S opened a local office in Manila, Philippines in September last year and has sought ways to contribute to the LNG infrastructure development in the country.
“If the LNG infrastructure development project SK E&S proposed is realized, the project is expected to create 800,000 jobs per year, or 2,200 jobs per day during the construction,” a spokesperson for SK E&S said.
Previously on June 4th, South Korean President Moon Jae-in met up with Philippines President Rodrigo Duterte to discuss joining hands for mutual cooperation in several areas including trade and investment, infrastructure, national defense & defense industry, agriculture, development cooperation, and culture & human resources exchange.
With both presidents in attendance, the Korean Ministry of Trade, Industry and Energy and the Philippines Department of Energy signed a Memorandum of Understanding (MOU) for the cooperation in the energy sector.
The construction of the LNG infrastructure in the Philippines under the letter of intent signed between SK E&S and the Philippines’ Department of Energy is one of three major projects included in the memorandum for mutual energy cooperation, SK E&S said.