More gas from Malampaya seen flowing after expansion

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THE consortium that operates the Malampaya deep water gas-to-power facility located off the coast of northwest Palawan expects more gas to flow from the plant once Phase 3 of the development is completed later this year.

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The Malampaya consortium consists of Shell Philippines Exploration B.V. (SPEX), Chevron Malampaya LLC, and state-run Philippine National Oil Co.-Exploration Corp. (PNOC-EC).

Sebastian Quinones, SPEX managing director, said the consortium has always been looking for more gas reserves since their contract for the Malampaya plant still has nine years to go before it expires.

“We are always looking for additional gas. Our hope is to find an additional reservoir in the area,” Quinones told a briefing over the weekend in Makati City.

The Malampaya gas field is estimated to hold recoverable gas reserves in the range of 3.08 trillion cubic feet (tcf) to 3.29tcf.

The facility was completed in 2001 at cost of $4.5 billion and supplies natural gas to three power plants in Batangas with a combined capacity of 2,700 megawatts.

An expansion project in two stages (Phases 2 and 3) was launched to maintain the existing level of gas production from the Malampaya gas field. Under Phase 2, two additional production wells at the field were built and completed in 2013.

Phase 3 involves the installation of a depletion compression platform (DCP) bridge-linked to the existing platform. The DCP was installed in early 2015 while the bridge linking works are in progress.

Quinones said this second platform is currently being commissioned for full operation by the middle of the year or before the end of 2015.

He said the platform, in combination with the two new wells, should sustain the gas output for many more years.

At the same time, Quinones said they are also looking at their competitors’ exploration activities.

“We are also looking at what other parties are doing. If there are resources and if they approach us, we can have a discussion,” said Quinones.

The consortium’s license for Service Contract (SC) 38 which covers the Malampaya natural gas facility is set to expire in 2024. Quinones said they have already filed with the Department of Energy (DOE) an application for a possible extension of the license.

“We already submitted a letter for the license extension in 2011 and we are just waiting (for the government’s decision). We are operating at the pleasure of the government, we will patiently wait,” said Quinones.

The Malampaya gas project provides up to 30 to 40 percent of Luzon’s power needs and reduces the country’s dependence on imported fuel by 30 percent.

Energy Secretary Carlos Jericho Petilla confirmed that the department has received the application for extension of the Malampaya license but that the DOE is still waiting for the consortium to submit their proposed terms.

The consortium shut down the Malampaya facility for a month to give way to the installation of the new platform which is intended to sustain the gas output from the Camago-Malampaya reservoir.

The Malampaya gas project supplies 35 to 40 percent of Luzon’s energy requirements. It provides natural gas to the 1,200-megawatt (MW) Ilijan power plant, the 1,000-MW Sta. Rita plant, and the 500-MW San Lorenzo plant, all in Batangas.

The three plants, in turn, supply power to the country’s largest distributor, Manila Electric Co. (Meralco).

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