Gas turbine sale signals the end of another Philippine LNG project

On 2 June 2026, Australia-based Energy World Corporation (EWC) announced the sale of two Siemens heavy-duty natural gas turbines and a steam turbine to the United States (US)-based Hallador Energy. The equipment, originally intended for EWC’s proposed liquefied natural gas (LNG) project in Pagbilao, Philippines, will instead be relocated to the US for Hallador’s natural gas project in Indiana, which will expand an existing coal-fired power plant.

The sale likely marks the end of EWC’s LNG-to-power project in the Philippines that has been under development for over a decade. The company estimates net proceeds from the deal at USD331 million, but notes that it also involves a non-cash impairment of USD285 million for the power plant, valued by EWC at USD617 million.

Although EWC states that it will continue to develop its LNG import terminal at Pagbilao, the terminal’s value was tied to the power plant, its “primary customer.” There are no pipelines in the project’s vicinity that would transport regasified LNG to other major consumers. Consequently, EWC notes that the LNG terminal assets, valued by the company at USD131 million, “may also be impaired.”

The sale underscores challenges facing the Philippine LNG sector, as well as broader global trends shaping emerging Asia’s LNG future. In 2025, two major LNG projects in the country were canceled, while two other corporations divested substantial stakes in their existing LNG infrastructure. Meanwhile, global gas turbine shortages, driven largely by data center power demand in the US and other regions, are delaying LNG-to-power projects in Southeast Asia, a region widely expected to drive global LNG demand growth over the next two decades.

Pagbilao LNG’s long history

The Institute for Energy Economics and Financial Analysis (IEEFA) has tracked EWC’s proposed 650-megawatt (MW) LNG-to-power project in Pagbilao for many years. In 2021, IEEFA highlighted the project as a cautionary tale for other potential investors in the Philippine LNG sector. In a later study, IEEFA assessed the share of viable LNG investments in the country at just 29%, which did not include the EWC project despite earlier claims that it was “well advanced.”

EWC signed a lease for the project site and held a groundbreaking ceremony in August 2009. Although the LNG terminal was initially expected to come online in 2011 and the power plant in 2015, the company delayed commercial operations in subsequent annual reports. In 2024, after years of limited progress, the project had reached “80% completion of Stage 1 of the 2x200MW Gas Turbine, 70% completion for the Combined Cycle, including the 250MW Steam Turbine, and 55% completion for the Power Transmission Line.” The company frequently cited transmission line delays as a key reason for the project’s slow progress.

Financial red flags for the project went well beyond its completion timeline. EWC planned to sell the power plant’s output directly into the country’s wholesale electricity spot market (WESM) without securing a power purchase agreement (PPA) with a customer to guarantee long-term offtake and revenue generation. As a result, the project would have been fully exposed to WESM volatility.

Moreover, the company did not sign any LNG purchase contracts for the project, leaving the power plant’s fuel costs exposed to global LNG spot markets. The extreme volatility in these markets over the past six years has repeatedly upended long-term price forecasts.

EWC also aimed to distribute LNG to third parties but never signed any contracts to sell LNG or regasified LNG to customers. Instead, the company’s 2025 annual report stated, “The Directors are confident that demand for LNG in the Philippines will exceed supply.” However, in October 2025, the Philippines’ energy secretary said that the country would not need more import terminals for the remainder of the decade.

Yet, even without a robust market value proposition, many remained confident that the project would be completed. In 2019, Fitch Solutions said the project was at a “breakthrough moment,” and the International Gas Union projected that the terminal would come online by 2020. In 2022, local media viewed the project as “locked and loaded,” while IHS Markit forecast that its completion, along with others, would drive the country’s LNG demand to 5 million tonnes by 2030. The EWC Pagbilao project demonstrates how investments lacking strong commercial fundamentals can inflate LNG demand expectations in emerging markets.

Bigger problems for Philippine LNG projects

The EWC-Hallador turbine deal follows several other high-profile LNG project cancellations in the Philippines. In November 2025, the Ayala Group subsidiary Enex Energy canceled its 1,100MW LNG-to-power project after multi-year delays, citing difficulties in securing long-term offtakers. The following month, Vires Energy suspended its 900MW LNG-fired power plant after canceling an associated LNG import terminal in 2024. 

The near-term outlook for future LNG projects in the country remains challenging. In October 2025, IEEFA forecast that no new LNG-fired power plants would come online in the Philippines this decade. Despite more than 10 gigawatts (GW) of proposed gas capacity, no projects have progressed beyond the initial stages of development.

The Iran conflict has caused LNG prices in Asia to double, raising concerns about gas supply, generation costs, and end-user power prices. In response, the Philippine government said it aims to use less LNG for power generation. 

Beyond fuel concerns, a global shortage of natural gas turbines has caused capital costs to skyrocket and extended delivery lead times to over six years. Turbine shortages are partly due to rising electricity demand for data centers in the US and the Middle East, and the EWC sale exemplifies these regions pulling turbines away from Asia to meet this demand.

IEEFA analysis has shown that, aside from EWC’s Pagbilao project, no other proposed gas-fired power project in the Philippines has secured turbines. Philippine officials have acknowledged these supply chain constraints.

As gas stalls, renewable energy accelerates

The Philippines’ energy transition isn’t waiting for LNG projects. In April 2026, the government announced plans to fast-track 1.47GW of new renewable energy projects to mitigate exposure to fossil fuel price volatility linked to the Iran conflict. The state-owned pension fund also announced loans of up to USD8,300 for rooftop solar panel installations. In March and April 2026, the Philippines imported over 3GW of Chinese solar panels, surpassing Pakistan as Asia’s largest solar panel importer.

A 2021 IEEFA report on the Philippine LNG sector noted, “As policies in the Philippines accelerate the transition to clean energy, natural gas-fired power plants reliant on volatile imported fuel prices will realize fewer opportunities for long-term guaranteed returns.”

This month, in its turbine sale announcement, EWC acknowledged this reality: “…the Philippines power market continues to evolve. Increasing penetration of renewable generation is changing dispatch dynamics for thermal power assets, reducing both average WESM prices and expected operating hours. This, in turn, impacts potential revenues and asset values.”

As global commodity market disruptions and gas turbine shortages continue to raise fuel and capital costs for LNG projects, investors in new LNG-to-power developments in the Philippines may ultimately reach a similar conclusion.