LNG Projects in PH Delayed by Limited Supply and High Prices

A new study shows that due to the global energy crisis and the Russia – Ukraine war, any plans to develop liquefied natural gas (LNG) in the Philippines.

The Institute for Energy Economics and Financial Analysis (IEEFA) has said in their report that imported fuel with high prices plus the limited global supply has made the Philippines’ LNG projects uncompetitive.

IEEFA Energy Finance Analyst Sam Reynolds has said in the report that “Risks surrounding limited global LNG supply and exorbitant costs are expected to persist over the next decade,”

He adds that “If passed on to consumers, high imported fuel prices would result in higher power prices for Filipino households and businesses, potentially stunting economic development,”

The IEEFA has mentioned that the Philippines is entering the international LNG sector in a period of “extreme uncertainty” due to the Russia – Ukraine war as the prices hit new highs.

While countries are clambering for limited supplies, the Philippines will have no choice but to try and outbid wealthier buyers in Northeast Asia and Europe and will then submit the country to “high prices and extreme volatility.”

According to the IEEFA, Europe has decided to buy more LNG and lessen its reliance on Russia’s gas since the war.

LNG prices are predicted to stay high until the year 2026 when significant new supply capacity goes online.

The IEEFA has said that the current prices of LNG at around $35 per MMBtu (British thermal unit) would be equivalent to prices of power reaching around ₱12.33 – 15.70 per kilowatt-hour for the fuel alone.

Source: Inquirer