DOE orders Shell to sell excess Malampaya gas ASAP
MANILA, Philippines — The Department of Energy has ordered Shell Philippines Exploration BV (SPEX) to sell as soon as possible the excess gas from the Malampaya natural gas site off Palawan.
This excess gas was said to have the capacity to power a 300-megawatt natural gas power plant, which would help shore up power supply reserves in the Luzon grid.
According to Energy Secretary Jose Rene D. Almendras, the DOE has already met with the Malampaya consortium, which earlier conducted a study to determine the actual amount of available excess gas. Since the consortium has been studying it since the beginning of the year, then they should already be able to submit to the DOE the results, he added.
“We want them to bid it out as soon as they can,” Almendras stressed, pointing at a number of investors already interested in building natural gas-fed generation facilities in the country.
The Malampaya consortium consists of SPEX and Chevron, which hold a 45 percent stake each in Service Contract 38, while the remaining 10 percent is held by PNOC Exploration Corp.
SPEX, for its part, has committed to submit before end June this report, according to Edgar Chua, country chair of Shell Companies in the Philippines.
“That’s due for submission to the DOE before the end of June. That’s the latest timetable. It’s just reporting back to the DOE how much additional gas can be available,” Chua said.
Two years ago, SPEX conducted a bidding for the sale of the excess gas, but was not able to award it to any prospective firm due to a failed bidding. It was earlier reported that several firms were interested in the excess gas, including Chevron Philippines, PNOC EC., Singapore-based Callandra LCNG Fuels Corp., and the Lopez-led First Gen Corp., among others.
Recently, First Gen president and COO Francis Giles Puno said the company was still keen on tapping the excess gas for its San Gabriel natural gas project in Batangas.
“We’ve been ready for San Gabriel four years ago, except that the San Gabriel is dependent upon the additional gas supply,” Puno noted.
With an estimated capacity to power up to 3,000 MW until 2024, the $4.5-billion Malampaya deep water gas-to-power project currently supplies natural gas to the 1,200-MW Ilijan plant of Korea Electric Power Corp. (Kepco); 1,000-MW Sta. Rita and 500-MW San Lorenzo plants, all in Batangas.
The excess capacity of about 300 MW was initially intended for the San Pascual co-generation project of a consortium led by Edison Mission Energy. This project, however, did not push through.
The gas field being managed by the Malampaya consortium is 2,788 feet deep in the waters of Palawan, with the natural gas being pumped out to a processing plant and is transported by tankers to Batangas to fuel the three power facilities.
