WHAT WENT BEFORE: Malampaya gas project

Earlier this year, the Commission on Audit (COA) discovered that P77.2 billion of the Malampaya funds had been lying “idle” for eight years, while P19.4 billion went mostly to projects unrelated to energy development.

Because of this, the COA proposed that Congress be allowed to appropriate the government’s share from the Malampaya Deep Water Gas-to-Power project so the funds could be included in the national budget to pay off public debts.

The $4.5-billion Malampaya gas project, which began in 2002, involves the extraction of natural gas from the waters of Palawan.

Also known as the “fuel of the future,” natural gas contains significantly lower amounts of sulphur dioxide, carbon dioxide and nitrogen oxide compared with other fossil fuels such as oil and coal.

Deposits

Malampaya, discovered in 1991, lies 80 kilometers northwest of Palawan island and 3,000 meters below sea level. It is estimated to hold about 2.7 trillion cubic feet of natural gas reserves and 85 million barrels of condensate.

The development of Malampaya is a joint undertaking by the government and the private sector.

In December 1990, Service Contract No. 38, or SC38 was signed by then President Corazon C. Aquino and representatives of the Office of Energy Affairs, Shell Philippines Exploration BV (Spex) and Occidental Petroleum Philippines. This marked the beginning of the exploration efforts on Malampaya.

In 1998, then President Fidel Ramos signed the declaration of the commerciality of the venture. In 2001, the Malampaya gas project was inaugurated in Batangas province.

10-percent stake

At present, Royal Dutch Shell, through Shell Philippines Exploration BV, has a 45-percent stake in the project while Chevron Malampaya LLC holds a 45-percent interest. The government has a 10-percent stake through Philippine National Oil Co. Exploration Corp.

Power generated using Malampaya’s resources currently accounts for roughly 30 percent of the energy produced in Luzon. It also provides natural gas to the 1,200-megawatt Ilijan plant of Korea Electric Power Corp. (Kepco), the 1,000-MW Sta. Rita and 500-MW San Lorenzo plants, all in Batangas.

In July 2011, it was reported that the money used for the acquisition of BRP Gregorio del Pilar, the biggest ship to be acquired by the Philippine Navy came from Malampaya funds. The cost of the 378-foot Hamilton-class cutter was reported to be around P450 million.

Gerry Ortega

Slain broadcaster and environmentalist Gerry Ortega was a known critic of the handling of the revenue from Palawan’s share of natural gas from Malampaya.

The total stream of revenues received by the government from its share in the project reached more than P200 billion from 2002 to May 2011, according to a June 2011 press release of the Department of Energy.

Inquirer Research

Source: malampaya.com, doe.gov.ph, PDI Archives