Banking on the country’s strategic geographical location, a relatively young workforce and improved relations with neighboring countries, Energy Secretary Alfonso Cusi said he is pressing full steam ahead for the realization of his vision to make the Philippines a regional LNG (Liquefied Natural Gas) hub.

In an interview, Cusi said he wants the groundbreaking this year as investors from Japan, Russia and China have already expressed interest in the project.

“We’re looking for the right party to carry out the project. Japan is very much interested. I just came from Japan together with other Cabinet secretaries, and we expressed our desire to have a ground breaking within this year, at least groundbreaking. But, of course, the Chinese are also very much interested; Russia is also very much interested,” said Cusi.

Cusi said it is enough that the necessary agreement with the selected investor-partner be signed with finality this year as the construction of the required facilities, estimated to cost $2 billion, would take some time to complete.

Under the LNG hub Cusi has envisioned, suppliers all over the world would ship LNG to the country and store it here for trading and eventual distribution.

Cusi said that while Singapore has already started ahead in a bid to establish itself as the regional LNG hub, the Philippines has a distinct advantage over it and other possible rivals such as Vietnam and Thailand, which have also expressed interest in the idea.

“(We have an advantage) because of our geographical location. And then, coupled with our good relationship now with China and other countries, we have to capitalize on that. Also, we have a lot of young workers,” said Cusi.

Besides, he noted that the Philippines is already serving somehow as the de facto LNG trans-shipment hub.

“We are already a de facto trans-shipment hub for LNG to China, but we still don’t have adequate facility. Big ships from Australia dock here, transfer the load to smaller tankers that bring that to China. So it is happening already; we would like to institutionalize that,” said Cusi.

“We just have to do our homework—show the benefit of doing it here in the Philippines,” he added.

Cusi said he has also challenged the Philippine National Oil Company to start pursuing the project immediately even before it could identify a potential investor.

What Cusi had in mind for the PNOC is to complete the feasibility study for the project and find the right partners with technical and commercial knowledge.

Cusi envisioned the project as soon as he assumed the post of Energy Secretary to ensure the country’s energy security, particularly in the power-generation sector.

He noted that at present at least 3,200 MW of the country’s supply of electricity is generated by plants running on LNG from Malampaya.

But with Malampaya projected to be depleted by 2024, Cusi stressed that it is imperative for the country to secure a supply of LNG as a “cleaner” alternative to coal, which represents around 30 percent of the current energy mix.

The envisioned LNG hub also makes sense, according to Cusi, because neighboring countries such as Malaysia and Indonesia are now importing LNG.

“We will be a net importer and the demand is growing for gas. So we said let’s give it a shot for the Philippines to become the LNG hub for the region,” Cusi said.

While Cusi stressed that the DoE is technology-neutral and not endorsing any particular fuel, he said LNG is suitable as an alternative for use of power plants in island-provinces that rely mostly on the more expensive diesel as fuel.

Cusi said that according to DoE estimates the country needs an additional 10,000MW of power between now and 2022 and an additional 33,000 MW between 2022 and 2040. He said new power plants must be built along the way and assure their fuel supply as well, including LNG.

Apart from helping secure the country’s energy security, Cusi said that if the country succeeds in establishing itself as a regional LNG hub, it would open business and job opportunities for our people.

Likewise, Cusi said that if the joint energy exploration between the Philippines and China on the West Philippine Sea bears fruit, we could become a net exporter of LNG and further boost our economy.