DOE wants plan before Malampaya maintenance
By Lenie Lectura – January 28, 2019
from Business Mirror
THE Department of Energy (DOE) is asking the operator of the Malampaya gas facility to come up with a contingency plan prior to the plant’s maintenance shutdown in October to avoid a spike in power rates.
“Late November last year, I asked Undersecretary Donato Marcos to write Shell and ask for the maintenance schedule of Malampaya for 2019. We don’t like to be surprised again. They said it would be in October this year,” Energy Secretary Alfonso G. Cusi said.
“What preparatory measures will be undertaken? Will there be fuel for plants dependent on Malampaya? I told the Service Contract 38 consortium, ‘Don’t we produce condensate?’ and they said yes. So, why don’t they prepare for it now?” he asked.
A source from Shell confirmed a scheduled maintenance shutdown (SMS) in the fourth quarter of the year that will last less than a week.
“We want to make the shutdown duration as short as possible to minimize the impact on the natural gas supply. This shutdown is relatively short compared to previous ones,” the source said.
SC 38 was awarded to the Malampaya consortium that operates the Malampaya Deep Water Gas-to-Power project, a joint undertaking of the Philippine government and the private sector.
The project is developed and operated by SPEX (Shell Philippines Exploration B.V) with a 45-percent stake on behalf of joint-venture partners Chevron Malampaya Llc.—also with a 45-percent stake—and PNOC-EC (Philippine National Oil Co.-Exploration Corp.), which holds the remaining 10 percent.
The gas facility fuels the following gas plants: the 1,000-megawatt Santa Rita, the 500-MW San Lorenzo, the 1,200-MW Ilijan, the 97-MW Avion and the 414-MW San Gabriel.
Malampaya has been providing a stable supply of energy, meeting 40 percent of Luzon’s power needs.
In previous maintenance shutdowns, the plant uses alternative fuel to continue operation and generate electricity. However, this is more expensive than natural gas. Natural gas as fuel only costs around P4 per kWh, while replacement fuel, such as diesel, costs around P6 to P8 per kWh.
The DOE is seeking other alternatives that do not involve shifting from a cheaper source of fuel to a more expensive one.
Unlike the Ilijan plant, the other gas plants can use condensate to keep the plants running during the Malampaya shutdown.
“So that there will be no interruption, what’s in the contract? We are just looking forward to what can happen and what can be done,” Cusi said.
The Shell source said that as per contract agreements with gas-plant customers, Malampaya is allowed to do scheduled maintenance shutdowns without any obligation to supply alternative fuel.
“Since we have advised our customers and the DOE early, hopefully they are preparing early also such as already sourcing their backup fuel,” the source added.
This year’s Malampaya SMS will cover technical work at offshore platform (West Philippine Sea) and at onshore gas plant (Batangas); repair of equipment; installation of critical spare parts; and check of instrumentation and controls.
