Shell is proceeding with front-end engineering and design work for its proposed LNG import facility in Batangas, Philippines, it said Sunday.
The decision comes a year after Shell signed a memorandum of understanding with the Philippines' Department of Energy.
As part of the agreement, Shell conducted a technical feasibility study for the development, construction and operation of a LNG import and regasification terminal adjacent to the Shell's refinery in Tabangao, Batangas City.
Shell has indicated its preference to use a floating storage and regasification unit to import LNG into the Philippines. Under its current plan, the 170,000-cubic meter FSRU will have an annual capacity of 4 million my/year with additional significant peak send-out flexibility, Shell said.
The FEED will be carried out by Shell's Technology Center Bangalore.
When asked about construction and startup schedules, a Shell spokeswoman said late Monday that it was too early to give a timeline. She also declined to comment on the project cost.
Last month, Roger Bounds, Shell's vice president for global LNG, said the company would make a final investment decision on the LNG project in the next 12 months. And local media has quoted Shell officials saying commercial operations were targeted to start in 2016 or 2017.
"The Batangas LNG project will allow us to increase the supply of natural gas -- the cleanest-burning fossil fuel -- to the Philippines, helping to meet growing energy demand," Bounds said in a statement.
Edgar Chua, chairman of Shell's Philippines operations, said in the same statement: "We look forward to successfully implementing the first floating storage and regasification unit in the Philippines. This will help enable continued gas supply into the future, beyond the life of the Malampaya asset."
Shell has a 45% operating stake, along with US major Chevron (45%) and Philippines' state-owned PNOC-Exploration Corp. (10%), in the Malampaya offshore gas and condensate field. The field supplies around 300,000 Mcf/d to three power plants in the country.
In 2011, Shell and Chevron committed to a $1 billion investment program at the field to extend its production life 15 years to 2039.
Besides Shell, Australia's Energy World Corp. is also constructing a LNG import terminal in Quezon and targeting completion in 2014.
Currently, Philippines does not import any LNG.
