THE Department of Energy (DoE) said it will set quotas for the use of indigenous natural gas by power generators, to comply with the requirements of the natural gas law.
In implementing rules and regulations (IRR) released last week, the DoE said it will prescribe “a mandated minimum percentage of the electricity demand of generation companies and/or distribution utilities to be sourced from indigenous natural gas.”
“Such minimum percentage shall be reviewed and adjusted by the DoE as may be necessary,” according to the IRR.
In January, President Ferdinand R. Marcos, Jr. signed into law Republic Act No. 12120 or the Philippine Natural Gas Industry Development Act, which seeks to promote natural gas as “a cost-effective source of energy and an indispensable contributor to energy security.”
The IRR calls for the priority utilization of indigenous natural gas over imported natural gas and other conventional energy sources.
“(The) procurement and utilization of indigenous natural gas, including without limitation, by gas-fired power plants, shall be prioritized over imported natural gas provided that it is consistent with the State’s policy of ensuring energy security and consumer welfare,” the DoE said.
“An indigenous natural gas supplier and aggregator shall provide fair and open access to its natural gas supply in a non-discriminatory and transparent manner through physical supply, administrative or financial contracts, or any other arrangements allowed by the DoE,” it added.
Aside from establishing the Philippine Downstream Natural Gas Industry (PDNGI), the IRR contains a plan to develop the Philippines as a liquefied natural gas (LNG) trading and transshipment hub within the Asia-Pacific.
The DoE was tasked to prepare the PDNG Development Plan based on modeling, considering forecasted demand, supply, and uses of natural gas, taking into account the plans submitted by PDNGI permit holders and participants.
The plan must be reviewed and updated every three years after its adoption.
Under the IRR, an entity may hold an interest in upstream and downstream natural gas facilities, as well as the supply and aggregation of natural gas, but will be subject to competition law. — Sheldeen Joy Talavera