Fitch Solutions said it is an opportune time for the country to start the importation of liquefied natural gas as prices fall in the global market.
Fitch Solutions, a unit of Fitch Ratings, said the country has to find alternative sources of gas to offset the declining output from Malampaya field.
“From a price standpoint, the next few years are likely to prove an opportune time for the Philippines to commence LNG imports,” Fitch Solutions said in its report dated April 20.
After the drastic decline in oil prices due to the coronavirus pandemic, experts projected that LNG would be next hit by the quick price drop.
Malampaya field, the country’s main source of natural gas, is expected to be nearly depleted by 2027. However, discovery and drilling activities for new sources in the country are sluggish due to unresolved maritime disputes in the West Philippine Sea.
“Global spot LNG prices are forecast to remain anchored at lower levels over the next few years,” Fitch Solutions said.
But the Philippines has not yet entered into any LNG supply contracts, it added.
“To date, several options have been mulled, mostly involving shorter-term procurements from portfolio players or from existing overseas assets held by project developers,” Fitch Solutions said.
It added the government has to give more emphasis on natural gas, LNG, and renewables in its energy plan.