Malampaya prod’n still good until 2026-2029
By Myrna M. Velasco – December 9, 2018, 10:00 PM
from Manila Bulletin
While several investing parties are now scrambling on the proposed construction of the liquefied natural gas (LNG) import facility for the country, the operator of the Malampaya gas field has revealed that the production life of the asset is still actually good up to years 2026-2029 to feed into the fuel needs of the existing five gas-fired power plants.
Shell Philippines President and CEO Cesar G. Romero
Shell Philippines President and CEO Cesar G. Romero indicated that such gas extraction potential is based on assumptions that there would be no commercial discovery yet of a new gas field.
“The life of Malampaya is anywhere between 2026 and 2029,” Romero said noting that within that range, Shell cannot just give an exact date when production decline or depletion will happen.
“It depends on the drawdown and it depends on the life of the field – that’s why we always give a window within that range… if you operate it hard, then you quickly deplete the asset,” he explained.
In essence, the life of the Malampaya field could still go beyond the 2024 lapse of the contract of the Malampaya consortium in Service Contract 38 led by Shell Philippines Exploration B.V. (SPEX) with American firm Chevron Malampaya LLC and minority interest-holder Philippine National Oil Company-Exploration Corporation.
“Hopefully the good timing before that 2026, we already have a new discovery or substitute… or if unfortunately we really can’t have a new find, only then we can make a more sensible decision on an LNG import facility, there’s still a good window for that,” Romero stressed.
The Shell chief executive opined that the perfect timing for government to really plan for LNG import terminal is still by year 2023 so it won’t risk having that facility getting stranded eventually – or better yet, he reckoned that it is actually more prudent for the country this time to push for fresh round of exploration activities that could result in new commercial petroleum discovery.
“Before we fully go head on for an LNG import facility, we should give a chance for exploration of indigenous resources first because we still have a window for it… if sensibilities prevail, indigenous always trumps import – it should always be preferred over imported LNG,” he added.
Shell, he said, is ready to invest even in “near-field prospects” as there had already been prospective discovery manifesting east of Malampaya.
“Shell remains interested in continued exploration in the Philippines – we’re prepared to make investments, both in near field and new developments, provided there’s clarity in fiscal regime,” he noted.
The proposed setting up of LNG terminal, he stressed, “that needs to be carefully evaluated because the economic question on LNG…if the intent is just to provide fuel to the existing plants which are of 3-gigawatt capacity, with just one discovery, that’s already feasible way into the future.”
Romero is referencing on a timeframe that will be beyond Malampaya’s life cycle or after their assessed 2026-2029 timeframe.
