The Malampaya consortium is targeting a gas supply deal with First Gen Corp. for the 414-megawatt San Gabriel and 97-MW Avion power plant from its banked gas.
“We are aware that San Gabriel and Avion are nearly completed—they are already hot commissioning. We are sure there will be discussions on how to get gas to fire those new power plants,” SPEX B.V. managing director Sebastian Quiniones told reporters.
He noted the consortium is working with the government to guarantee the revenues from the gas, despite the low oil price environment.
The Malampaya consortium is composed of SPEX, Chevron Malampaya LLC and Philippine National Oil Co. Exploration Corp.
He also bared a company won a certain part of the banked gas from the initial bidding.
The managing director said the winning bid submitted “basement prices—not floor prices.”
Quiniones further pointed out the consortium is negotiating with another firm, which will likely close the bidding rounds.
He also disclosed there were few bidders for Malampaya’s banked gas.
The SPEX head explained the banked gas will be split with the government’s and the consortium’s share.
“We split the banked gas—that was our commitment. As we go forward, we obviously want the government to benefit also and also the consortium,” he said.
Quiniones stressed the capacity depends on the demand of the power market based on baseload, mid-merit and peaking requirements.
“It depends on what the market is asking, because remember there is baseload, mid-merit and peaking. All of those have different slices and dices and Wholesale Electricity Spot Market [WESM] prices all of them separately,” the managing director said.
He, however, assured the completed phase 2 and 3 makes the consortium “technically capable of producing the gas required by the industry.”
Quiniones said the consortium could supply until the end of its contract in 2024.
The banked gas has a total quantity of 227.99 petajoules, with an average daily quantity of 78.1 terajoules. It could be delivered from this year until the end of Malampaya’s service contract in 2024.