MANILA (Reuters) – The Philippines is encouraging importers of liquefied natural gas (LNG) to voluntarily aggregate purchases of the super-chilled fuel in efforts to lower prices and improve market efficiencies, government officials said on Wednesday.
“If there is a voluntary effort, then we encourage the industry to aggregate their supply of importation of LNG,” said energy secretary Raphael Lotilla, speaking to reporters at a press event.
He added that the government is studying options to appoint a state entity to lead aggregate buying efforts, but that non-government entities could do so as well.
While the government does not want to influence the market, Energy Undersecretary Alessandro Sales said “there are efficiencies in aggregation that can be very beneficial to the consumer.”
“All of this has to be worked out in the market framework,” Sales said.
“We have to consider all of that, because there are also considerations in terms of energy security that have to be factored in when we move forward in finalising any plans on this aggregation.”
Currently with two import terminals, the Philippines began shipping in LNG in mid-2023 to replace gas from its depleting Malampaya field. Imported gas costs however are higher than domestic production, and are passed on to consumers in the form of higher power prices.
The country’s debut LNG cargo arrived in April 2023 to supply San Miguel Global Power Holdings. Power producer First Gen Corp then sought its commissioning cargo in the following month before buying its first cargo in July 2023.
The Southeast Asian nation received 19 cargoes of LNG last year, all on a spot basis, according to data from analytics firm Kpler. None of the importers have signed long-term deals to import LNG, which helps hedge against volatility in the spot market and provide security of supply.
(Reporting by Karen Lema in Manila, writing by Emily Chow in Singapore; Editing by Michael Perry)
