Advancing Energy Security: Fueling Sustainable Progress with Liquefied Natural Gas (LNG)

Against a backdrop of evolving global dynamics, the Philippines faces the challenge of ensuring energy security. In line with the National Renewable Energy Program, the government is pursuing an ambitious national renewable energy (RE) power generation mix target of 50% by 2040 wherein liquefied natural gas (LNG) will serve as the cleaner transitional bridge from fossil fuels to renewable energy.

The utilization of LNG facilitates the country's energy transition and ensures a stable power supply. LNG provides flexibility to support grid demands for baseload supply, as well as reliable mid-merit supply, which is crucial in facilitating the development of RE technologies such as solar and wind. With the Philippines emerging as a new frontier in the LNG market, the growth of its LNG industry would foster more infrastructure development, technology transfer, and job creation, trade, all of which will substantially contribute to the country's overall economic growth and prosperity.

The diminishing reserves of the country's sole gas field, Malampaya, is the fuel source of four major plants in Luzon, comprising about 2,081 MW or 12% of the grid's dependable capacity. While the drilling of new wells has yet to begin to extend the lifespan of Malampaya, there is urgency to shift to imported LNG to keep up with the growing power demand of the Luzon grid. Compared to coal, using LNG for power generation will reduce greenhouse gas emissions by 50%. However, the prospect of higher and volatile prices of LNG in the world market is a factor that needs to be understood and mitigated. All stakeholders need to collaborate and explore possible measures to tame the higher cost of LNG as it will contribute to a significant portion of the country's power mix during the transition to renewable energy.

This scenario creates the impetus for Congress to prioritize the passage of the Philippine Downstream Natural Gas Industry Development Act, establishing a preference for natural gas as a cleaner and cost-effective energy source. With approximately 60% of the country's power derived from coal, the bill aims to accelerate investments by offering incentives that would open the country to the right LNG players and long-term foreign investors that would aggressively forge a robust natural gas industry. This law aims to strengthen and reinforce regulations governing the natural gas industry by addressing existing gaps and enhancing oversight, while ensuring transparent and reasonable price of natural gas.

To further this, the Stratbase ADR Institute, in partnership with CitizenWatch Philippines is organizing a hybrid conference entitled "Advancing Energy Security: Fueling Sustainable Progress with Liquefied Natural Gas (LNG)." This hybrid event will be held on June 18, 2024 (Tuesday) from 9:00 AM –12:00 PM (PHT) at Function Rooms 1-4, Asian Institute of Management (AIM) Conference Center and will be available via Zoom.

This event will bring together key stakeholders from the government, private sector, academe, and civil society to explore ways on boosting LNG adoption and accelerate the development of the industry in the Philippines. Moreover, the event offers a chance to gain insights into the diverse challenges and opportunities linked to incorporating LNG, contributing to the establishment of a stable and reliable power supply to attain energy security.