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Somewhere, beneath the sea

SULU Sea’s huge natural gas deposit has remained untapped to this day as the country is expected to see the depletion of its active and main natural gas mine in the Malampaya deep, the sea wells off Palawan, and as the South China Sea debacle has stalled future exploration and drilling for natural gas in the area.

The Department of Energy’s record has indicated a deposit that could fuel the power needs of Mindanao and some parts of the country for the next 20 to 30 years, according to an applicant to drill and extract it.

But until when government gives the green light is anyone’s guess while the energy sector hobbles between developing dirty coal sources as the base load and promoting renewable, but small-scale, energy sources, to hopefully tip the balance in the future in favor of the so-called clean energy.

Lying just offshore, although in the still troubled Sulu islands, are natural gas deposits estimated to be between three and five million tons, according to Graham Elliott, executive director of Energy World Corp. (EWC), who manages the company with nine power plant and natural gas explorations in the Philippines, Indonesia and Australia.

If tapped soon, the country has the option to solely use the NG deposits for domestic power need than to export it to other countries, he said.

Elliott said the wealth of information at the DOE’s archives and the discovery of the deposits would help shorten the usually long gestation of the project, from the long exploration and then the construction of offshore and land drilling facilities, including the laying of pipelines.

Dr. Amildasa D. Annil, DM, facilitator and coordinator of the Energy World International Ltd., said natural gas deposits in the Sulu area have been discovered on Lugus Island, about 32 miles southwest off the provincial capital of Jolo, and on Pearl Bank, another islet farther west of Lugus.

The EWC said voluminous DOE records indicate that the natural gas deposit in the area would be “good for 3,000 to 5,000 megawatts of power for 20 to 30 years.”

Because of the discovery and initial explorations undertaken by previous companies, Elliott said the company may only need to re-drill some wells as well as find new wells, and to replace some pipelines, from the Pearl Bank to Lugus Island.

In its plan, the EWC would establish the LNG power plant in Barangay Parian Kayawan on Lugus Island, where there would also be some drillings.

The EWC had filed in 2017 its application of intent to undertake the project of exploration and extraction of oil and natural gas in the Sulu area. Elliott said there were continued discussions with the DOE “because we have also the natural gas terminal hub and gas-fired power plant in Pagbilao, Quezon.”

“So the Sulu project has been part of our discussion,” he added.

“I am not saying that someone has been delaying the project,” he clarified though.

According to Elliott, their Pagbilao liquefied natural gas hub terminal, the first in the country, and 650-megawatt combined cycle gas fired power plant, had also met some delays since getting the DOE endorsement in 2011. Earlier reports cited right-of-way issues.

The entire construction, already 80 percent complete, ground to a halt because of an unfinished substation.

In November 2018 the project was certified as an Energy Project of National Significance by the DOE.

The Sulu Sea project would be EWC’s third natural gas exploration and power plant project in the Philippines.

Of this, he said, “I understand that the DOE was working out jurisdiction issues” with the Bangsamoro Autonomous Region in Muslim Mindanao, as well as tackling existing laws about the explorations.

3-legged stool

For a major national building project like this natural gas exploration, to proceed smoothly, three important things must work out seamlessly, he said. “One leg is the investor, like us, which brings in the money, the technology and the knowhow. The other leg is the local government support, and the other leg is the national government, including the DOE and ultimately Malacañang.”

Aside from the natural gas, the EWC intends to tap the strong sea water current between the islands of Lugus and Tapul as source of hydroelectric power, said Dr. Annil in his presentation.

For the natural gas project alone, the company estimated to spend $1 billion, and needed between $300 million and $400 million to start it.  “I am confident that we have the equity investors to join us as soon as we have the permission from the DOE. I am also confident of the support from the Development Bank of the Philippines due to its impact on employment and the other investments that would be encouraged in this region, the BARMM, that really needed investments.”

He added, “There is no problem with human resource also because there are several Filipinos who have built NG power plants in several countries. There are many Filipino engineers and skilled workers who are too willing to work out a NG power plant in the Philippines.”

He said the company will also help develop skills from the unskilled work force in Sulu and the surrounding areas if only to develop the area.

He is confident the project would have a strong impact on peace and order in Sulu, currently the hotbed of the Abu Sayyaf terror activities. He said its Pagbilao project did that in Quezon, also a known hotbed of communist insurgency. He said the project helped persuade some 500 insurgents and sympathizers to work in the project and thus helped government in minimizing guerrilla activities.

The Sulu Sea project would also promote the area as an ecotourism destination, Elliott said, “because of the natural beauty of the place.” The company plans to build condominium-type housing for workers and to donate them later to the local government as hotel accommodation for tourists, once the EWC no longer needs them.

Local support

FOR local support, Lugus Municipal Mayor Hadar Hajiri has assured EWC it could immediately allot 30 hectares as the town’s counterpart to the project’s refinery plant in Barangay Parian Kayawan.

While natural gas is not renewable, “it is clean and its utilization would be part of that government direction toward tapping renewable energy,” he said.

“What we are not seeing yet is the support from the national government,” he said. But while the Covid-19 pandemic has further cut further advances in the discussion with DOE for more than a year, he said he was optimistic of the prospects this year.

Optimism this year

In his October 2018 report to the Asian Development Bank, Energy Secretary Alfonso Cusi said, “Natural gas and coal remain the predominant indigenous fossil fuel resources in the Philippines” with proven gas reserves at 98.54 billion cubic meters “and economically recoverable coal is estimated at 316 million tons.”

He cited the other sources of energy: “proven oil reserves are around 100 million barrels; the resource potential of hydropower is estimated at 13,097 megawatts (MW); wind energy potential is estimated at 76,600 MW with wind power densities ranging between 300 watts per square meter and 1,250 W/m2 based on 2014 National Renewable Energy Laboratory geographic information system data.”

He said in the report, “Estimates for potential solar capacity are also promising with the country enjoying average  global horizontal irradiance levels of 5.1 kilowatt-hours/m2/day  [and] biomass resources from agricultural residues are likewise available for industrial and household use.”

In July last year, Cusi, in an Energy and Sustainable Development webinar organized by the Ateneo de Manila University School of Government, affirmed government commitment to fully implement Republic Act (RA) 9513 or the Renewable Energy Act of 2008.

But, he said, this must be done alongside the tapping of other energy sources to ensure sufficient power capacity in the entire Philippine grid, apparently referring to the continued applications for coal-fired power plant projects in parts of the country, including previously energy-plagued Mindanao.

“I fully support the development and utilization of our renewable resources—but without sacrificing the attainment of our energy security,” he added.

Later in November of 2020, Cusi told an online discussion with other ministers and high-ranking government officials in Southeast Asia that the government will pursue a clean energy or low-carbon scenario in the future: “There will be a slower growth of the total primary energy supply (TPES), as a result of the country’s energy efficiency and conservation measures.”

The energy chief added, “Coal and oil shares will also continue to decrease due to the use of alternative fuels for transport, among others.  This also translates to a power generation mix that shifts from being coal-centered to one where RE, natural gas, and other emerging clean-energy technologies will have increased shares.”

He projected that combined clean energy sources would improve to more than 66 percent of the total generation by 2040.

According to Cusi, the DOE is coming out with the National Renewable Energy Program 2020-2040 to achieve the target of 34,000 MW of renewable energy installations by 2040. He also approved the updated Philippine Energy Plan (PEP) 2018-2040 to contain “the necessary adjustments that the country has to make because of recent global developments, including the impact of the Covid-19 pandemic on the energy sector.”

Cusi said he submitted these to the House of Representatives and the Senate. “The updated version will help the energy family and our stakeholders better understand what the energy situation will be 20 years from now.”

Develop Sulu

To Elliott, it would be the privilege of EWC to help develop clean energy sources for the country, and to develop economically this part of the Philippines that have wallowed in poverty and lack of opportunity.

If given the go-ahead, he said, the company would be able to proceed faster than “the natural long route of exploration and construction because the data and discovery are already there.”

“Sulu, or even Mindanao, would opt not to export the deposits elsewhere out of the country, or to share them only with the rest of the country. That’s their option that we will respect,” he said.

Their hub terminal in Pagbilao would be used only to accommodate the big tankers from outside and to ship the supply to the rest of the Philippines. Or, this may be used to get the extra supply from Sulu to be shipped to other areas of the country.

Image credits: Gagarych | Dreamstime.com



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