Malampaya resumes natural-gas delivery

By Lenie Lectura – February 16, 2017

from Business Mirror

The 20-day maintenance shutdown of the Malampaya natural-gas facility in Palawan concluded on Thursday, and had resumed  providing gas to the gas plants that provide an aggregate capacity of more than 3,000 megawatts (MW) in Luzon.

In an update provided by Shell Philippines Exploration BV (SPEX) to the Department of Energy Undersecretary Felix William B. Fuentebella, “All major maintenance and engineering works are completed.” Moreover, “systems are being started up already”.

“Malampaya natural gas is pressurized and already flowing between offshore platform and onshore gas plant. Flaring already commenced at both facilities,” a text message from Fuentebella read, adding, “manpower at offshore platform back to normal operational levels.”

As of late Wednesday, SPEX is coordinating closely with Santa Rita, San Lorenzo and Ilijan power plants for specific time to resume natural-gas delivery.

The gas facility fuels the following gas plants: the 1,000-MW Santa Rita, the 500-MW San Lorenzo, the 1,200-MW Ilijan and the 97-MW Avion plant. These power plants supply an aggregate capacity of 3,211 MW to the Luzon grid, 2,565 MW of which is supplied to the Manila Electric Co. (Meralco) franchise area.

The maintenance activities, which started from January 28 to February 16, include repair of the sub-sea facilities, upgrades on the platform and maintenance on the onshore plant.

During a public hearing on Joint Congressional Power Commission (JCPC) at the Senate, Fuentebella said the Malampaya gas facility started delivering gas at 7 a.m. on Thursday.

“This is the latest we got from Shell. It is able to deliver natural gas to the plants. This means the gas plants are now utilizing gas from diesel. So, there’s efficient supply,” the Department of Energy official said.

There was no power-supply outage during the scheduled maintenance because of adequate supply. Fuentebella explained the effectiveness of the demand side management, which is aimed at the electric utilities’ activities designed to encourage and influence their customers’ use of electricity in ways that will produce desired changes to both the timing and level of electricity demand or load shapes.

“The demand side management helped. Also, the low demand was because of the cold weather,” Fuentebella added.

These plants utilized alternative fuel to continue operation and generate electricity during the maintenance period. However, this is more expensive than natural gas. Natural-gas as fuel only costs around P4 per kilowatt-hour while replacement fuel, such as diesel, costs around P6 to P8 per kWh.

Meralco said the estimated incremental fuel cost over the period of the 20-day outage would amount to P2.4 billion. It has a pending application before the Energy Regulatory Commission  to collect from its customers an additional P0.30 per kWh in generation charge for three months starting next month, brought about by the expensive fuel utilized by the gas plants during the 20-day shutdown of the Malampaya natural-gas facility.

In all, Meralco seeks to collect a total of P0.9174 per kWh.

“The incremental fuel costs due to the use of liquid fuel is expected to increase the overall rate of Meralco for the March 2017 billing by about P0.9174 per kWh,” it said in its eight-page application.