Malampaya to last 10 more years

By Alena Mae S. Flores – December 07, 2017 at 09:20 pm
from manilastandard.net

The Malampaya natural gas field in northwest Palawan, which supplies fuel to three major power plants in Batangas, is expected to continue producing for the next 10 years, an executive of the consortium operating the field said Wednesday night.

Shell Companies in the Philippines chairman  Cesar Romero said the natural gas field could provide fuel until 2027 or 2029. Reserves in the gas field were originally expected to be depleted by 2024.

SCIP chairman Cesar Romero told reporters the life of the Malampaya gas project would depend on the drawdown. SCIP includes Shell Philippines Exploration B.V. which owns a 45-percent stake in the Malampaya gas project which fuels power plants with a combined capacity of over 3,000 megawatts.

“Based on what we know, it depends on the drawdown.  I think there is still gas until 2027 to 2029. That range. So [by] 2024, it’s not finished, zero,” Romero said.

He said Spex was in discussions with the government on the extension of service contract 38 or the Malampaya gas project which was set to expire by 2024.

“We’re in discussions with government on how it goes…It’s so difficult to think about these things [with] the CoA [Commission on Audit] case still pending. It’s difficult to make concrete plans until you are able to sort out CoA,” Romero said.

Spex has a pending arbitration case against the government over the computation of corporate income tax of the Malampaya project.

The case stemmed from the Commission on Audit’s issuance of a notice, asking the Energy Department to collect around P151 billion from the Malampaya consortium for the period 2002 to end June 2015 arising from COA’s tax interpretation that  corporate income tax should not form part of the government’s share in the Malampaya project.

“What is challenging, any action we think about at the moment, is put on hold because we have to sort out CoA first… It would be nice to be able to plan and look forward. But for the moment, our priority is to be able to sort out CoA,” Romero said.

Energy Secretary Alfonso Cusi said government would still aggressively pursue the planned $2-billion integrated liquefied natural gas facility even if there would still be available gas at Malampaya beyond 2024.

“If there is still gas, we have to [pursue LNG]. That’s part of the security,” Cusi said.

Cusi earlier said he wanted the Philippines to become the hub of LNG  in Southeast Asia.

He said the government aimed to roll out the Batangas LNG terminal by 2020 to safeguard against the anticipated depletion of the Malampaya gas facility by 2024.

Cusi already signed Department Circular No. 2017-11-0012 which establishes the regulations “with respect to siting, design, construction, expansion, rehabilitation, modification, operation and maintenance of the  natural gas industry.”

The circular will ensure compliance to policies on imported LNG from the loading to the LNG terminal, transmission and distribution system.

It also govern policies for the indigenous gas after the point of sale up to the customer and LNG from the filling connection to storage and delivery to terminal and foreign market.