Amid the gaffes of the administration of President Duterte—from his failed drug war which his men are now blaming on Vice President Leni Robredo who was appointed as drug czar but fired even before she got to warm her seat, to the national embarrassment the country has been getting for its unpardonable solecisms in hosting the biennial Southeast Asian Games (SEA Games)—comes a whiff of good news from the south.
The most unlikely bearer is a foreign company that this government has given little attention to and, to a large extent, hasn’t gotten any assistance from.
British-based Energy World Group (EWG) through its subsidiary Energy World International Ltd. (EWI) in partnership with Hadar and Medzar Oil and Gas Corp. (HMOGC) is bankrolling $3.2 billion (the largest single investment in Muslim Mindanao) to develop a liquefied natural gas refinery complex in Lugus Island, Sulu.
EWG’s EWC is the same company that has built an LNG power plant in Pagbilao, Quezon, which for years has been held hostage by government red tape. It’s more than 90-percent complete, but was restricted to tap into existing transmission grid despite its repeated pleas. Without the transmission grid, the company could not distribute the power that the country badly needs.
It is now building its own transmission facilities using available funds from its operations and is optimistic of the plants’ early commissioning. In an exclusive interview, EWI Executive Director Graham Elliot explains that there is no need to rush the completion of the (EWC’s LNG Pagbilao) transmission grid: “Everything is running smoothly now and there is no reason to doubt our determination to push through with the project. Financing has never been a problem as what our detractors have been trying to paint.”
The Sulu project is heaven sent for EWG. Once operational, the LNG Pagbilao plant no longer needs to import natural gas. The synergy of the two projects—Lugus’s and Pagbilao’s—will naturally come into place.
Sulu Vice Gov. Sakur Tan II, Mayor Hajiri, and EWI’s Elliot recently held the groundbreaking rites at Barangay Parian Kayawan, one of the island villages in Lugus town, which was found to have huge natural oil and gas deposits believed linked to the petroleum-rich Brunei Darussalam. The Lugus project is expected to kick-start economic development in the Autonomous Region in Muslim Mindanao (ARMM) the reason it is most welcome in the region, according to Mayor Hajiri, who is also the president and chief executive officer of the HMOGC.
EWI knows that there has already been sufficient gas discovered in the Sulu Archipelago, which can churn out a yearly output of 1 million tons of LNG that is more than ample to distribute 1,000 megawatts of power for 20 years.
The natural gas has been discovered in areas that have been handed back to the Department of Energy. EWI seeks to tap into this already discovered gas by bringing it ashore on Lugus Island, where it will be processed and used as the foundation of a new Petroleum Park, which will provide economic development and clean energy for the Philippines. Before Lugus, the most significant gas discovery was that of Malampaya with reserves of about 2.7 trillion cubic feet of natural gas and 85 million barrels of condensate.
The Lugus Island Petroleum Park will simplify the development of existing natural gas discoveries in the Sulu Sea and surrounding areas. It will consist of a LNG production and export terminal, seaport, airport, industrial precinct, residential area and power generation.
I could foresee that this investment will bring employment and fiscal development to Mindanao, long battered by security nightmare. With ARMM in place, it is expected that all armed elements marauding the region will come together to usher in peace and prosperity.
Oil has also been detected in some of the existing wells in the Sulu Sea. The need to refine this product into a higher value export commodity within the region is significant to the future economic growth of the Sulu archipelago. The Petroleum Park will cater to potential future discoveries of commercial oil reserves by making an allowance for the initial infrastructure to be colocated within the developing area.
The planned oil refinery, BusinessWise learned, will be developed at an appropriate time in the future. The oil refining area will be designed in such a way that it will cater to the domestic demands of the Philippines as far as possible, while also being tailored to meet the needs of the export market.
An international and domestic airport will also be built to ensure that physical communication links required for the economic development of region are catered to. The facility will serve passengers and cargo, allowing for new markets, domestically and globally for regional products.
Increased accessibility will also help open the region to tourism projects. This will add another pillar of growth to the local and regional economy by providing for long-term sustainable employment. I just hope that the government will give its utmost assistance to this ambitious, yet doable project. It’s about time that a venture of this magnitude be given the utmost priority it so deserves.
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