The Department of Energy (DOE) said Tuesday it would soon meet with industry stakeholders to discuss action plans for the upcoming 22-day shutdown of the Malampaya gas facility starting October 2.
The agency said it will call a coordination meeting with the Malampaya consortium operator, natural gas power plants, Manila Electric Co. (Meralco), and market operator, among the other industry players, to address all issues concerning the Malampaya gas field.
The meeting will also tackle the gas restriction incident that occurred over the weekend. The DOE received information from the Malampaya consortium operator that the gas restrictions will be lifted Tuesday. However, higher prices may adversely affect consumers.
“These restrictions affect the electricity prices that consumers pay and they will have to be informed on the causes of price increases,” Energy Secretary Alfonso G. Cusi said.
The Malampaya consortium is composed of UC38 LLC, PNOC Exploration Corp., operator Shell Philippines Exploration B.V. (SPEX).
The Malampaya gas facility currently supplies five gas plants with a combined capacity of 3.2 gigawatts under term supply deals due to expire in 2024. These are Ilijan, 1,000MW Santa Rita, 500MW San Lorenzo, 97MW Avion and the 420MW San Gabriel. Except for Ilijan, all four gas plants are owned by First Gen Corporation.
When the gas plants can’t source gas from the Malampaya gas field, they shift to a more expensive liquid fuel. The gas plants where Meralco sources its requirements are Sta. Rita, San Lorenzo and Ilijan. Together, they supply almost 60 percent of Meralco’s captive market requirements. As of press time, Sta.Rita and San Lorenzo continue to run on wholly on liquid fuel, since there is zero gas supply from the Malampaya gas field. San Gabriel was shut down because it is receiving no fuel.
Meralco, for its part, said it has yet to assess the impact of the Malampaya maintenance shutdown on pricess and overall supply.
“It would be helpful if SPEX can give all stakeholders more lead time or advanced notice to allow everyone to prepare for any gas supply shutoff or reduction especially on how long the ongoing restriction will continue and when it will eventually be lifted,” said Meralco spokesperson Joe Zaldarriaga when sought for comment.
Cusi has asked SPEX to explain the gas restrictions that affected the delivery of fuel to the natural gas power plants.
While the DOE already promulgated a ‘no pass-on’ provision in the 2018 Competitive Selection Process Policy, these contractual arrangements are covered by previous power supply contracts signed by Meralco.
“Meralco’s notification to the public, through its spokesperson, requires more details. Are these part of the previous contracts that it signed with suppliers? Perhaps it can also suggest to consumers additional information to help alleviate their plight,” Cusi advised.
In the meantime, Cusi asked the Independent Electricity Market Operator of the Philippines to simulate the impact of these gas restrictions and the upcoming Malampaya maintenance shutdown on prices.
“While there is sufficient supply of electricity during this period, consumers need to know the effects of all these to their power bills,” Cusi said.
First Gen Power Corp., which owns most of the gas plants fueled by Malampaya, said it has been advised by the Malamapaya consortium that gas supply would resume starting Tuesday.
