Natgas plan to avert crisis post-Malampaya pushed

By Jed Macapagal - May 20, 2021
https://malaya.com.ph/index.php/news_business/natgas-plan-to-avert-crisis-post-malampaya-pushed/

A bill that aims to increase the country’s supply of natural gas from liquefied natural gas (LNG) sources has been filed by Sen. Sherwin Gatchalian, committee on energy chair.

Senate Bill 2203 seeks to avert a possible energy security crisis once operations of the Malampaya gas field project close for good.

The bill aims to put in place a national energy policy and framework for the development and regulation of the Philippine midstream natural gas industry.

The Malampaya resource’s service contract is set to expire in 2024 and the estimated 858,834 million standard cubic feet remaining fuel in the field would be completely exhausted by the first quarter of 2027.

“We could be facing a major energy crisis less than six years from now unless we find alternative sources to supply our country’s demand for natural gas. What we fear is a massive brownout in Luzon which might happen if the Malampaya is completely depleted. It affects not only the households but also industries that may leave a big gap in the country’s economy,” Gatchalian said.

A legal and regulatory framework to be established by the Midstream Natural Gas Industry Development Act will help unlock the untapped potential of natural gas, especially LNG to achieve greater Philippine energy stability, sustainability and savings.

Amid fears of total supply depletion of natural gas in the country, private proponents are racing towards the development of the first LNG terminal that will bridge the gap that will be left by Malampaya.

First Gen Corp. said its planned LNG terminal through subsidiary FGEN LNG Corp. is slated for completion by third quarter next year.

First Gen currently sources all of its natural gas plants’ fuel requirements from Malampaya.

Emmanuel Singson, First Gen chief finance officer, said at the company’s virtual annual stockholders meeting yesterday capital expenditure for the project is around $120 million this year as it begins construction..

Last month, FGEN LNG executed a five-year time charter party with BW FSRU IV Pte Ltd. for the charter of a floating storage regasification unit.

The company said BW Paris, the facility that will be chartered will have a LNG storage capacity of 162,400 cubic meters and a nominal and peak gas send out capacity of 500 million standard cubic feet per day (MMscfd) and 750 MMscfd, respectively.

The company said its nominal send out capacity is 25 percent more than the production capability of Malampaya which at its peak, only produced a maximum gas volume of approximately 400 MMscfd.

Apart from FGEN LNG and Tokyo Gas, other companies currently in the middle of developing LNG terminals in the country are Excelerate Energy with Topline Energy and Power Development Corp.; Batangas Clean Energy Inc. with LCT Energy and Resources Inc.; Energy World Gas Operations Philippines Inc.; AG&P Co. of Manila Inc. with Osaka Gas Co. Ltd.; Shell Energy Philippines Inc.; and Vires Energy Corp.

All proposed projects are located in Batangas except for Energy World which is being developed in Quezon Province.