THE Power Sector Assets and Liabilities Management Corp. (PSALM) is pursuing plans to increase the amount of gas it sources from the Malampaya gas field.
PSALM earlier signed a memorandum of understanding (MOU) with the Philippine National Oil Co. (PNOC), the exploration unit of which holds a 10-percent stake in the Malampaya gas project, for the possible sale and purchase of “banked gas” from the same gas field.
There has been no development since the signing of the MOU due to the untimely passing of PNOC President Reuben Lista last August 31. The MOU was signed last June 7.
According to PSALM President Irene Joy Besido-Garcia, the MOU indicates that PNOC will look into whether or not PSALM can draw the banked gas. “If there is a guarantee that PSALM can indeed draw the banked gas, PSALM will buy the banked gas.”
Officials in the power industry define banked gas as the accumulated gas of the Ilijan power plant that was not utilized due to transmission constraint, among others. Since then, the banked gas was placed under the supervision of PNOC. Based on estimates, the volume of banked gas has declined to less than 100 petajoules.
“We agreed that they would have to coordinate with [the Malampaya consortium] to find out if we can actually get the banked gas. The moment there is a guarantee then that is the time we execute a definitive agreement for the sale of the banked gas,” said Garcia.
The Malampaya consortium is now composed of UC38 LLC, a subsidiary of Udenna Corp. (UC), which holds a 45-percent stake; state-owned PNOC Exploration Corp., 10 percent; and Shell Philippines Exploration B.V. (SPEX), 45 percent.
However, a deal was sealed between SPEX and another UC firm controlled by Davao businessman Dennis Uy. Malampaya Energy XP Pte. Ltd. had signed a deal with SPEX to sell its 45-percent operating interest in SC 38, which includes the Malampaya gas field. The turnover to Malampaya Energy is expected to be concluded in December this year.
The changes in the consortium members, the fast depletion of the Malampaya gas field and the expiration of the Malampaya gas project’s service contract with the Department of Energy (DOE) three years from now are the concerns laid on the table.
“At moment, we are still awaiting confirmation from both PNOC and Malampaya on whether we can draw the banked gas. But, at the moment, PSALM has its own gas supply agreement with Malampaya where we can actually draw gas from Malampaya gas field pursuant to our own GSPA [gas sale and purchase agreement].
What we want to happen is to increase our drawing from Malampaya by relying on the banked gas of PNOC. That’s why, at the end of the day, we want to make sure that if we commit to buy the banked gas, we can truly be able to draw from it,” said Garcia.
