Danessa
Rivera (The Philippine Star) - June 19, 2018 - 12:00am
MANILA, Philippines —
The oil and gas exploration arm of state-run Philippine National Oil Co. (PNOC)
is looking into the possibility of continuing to run the Malampaya deep water
gas-to-power project without its present partners, a ranking official of the
Department of Energy said.
The energy department
has tasked PNOC Exploration Corp. (PNOC EC) to conduct a study on the possible
scenarios for the Malampaya project once its contract expires in 2024, DOE
Assistant Secretary Leonido Pulido said in a Senate hearing yesterday.
He said there are two
parts to the study, the first one will determine whether it will be commercially
viable and more beneficial to the national government for PNOC EC to continue
the agreement. The second part, on the other hand, is intended to determine if
drilling an additional source with 1,000 megawatts (MW) of capacity east of the
Malampaya project is commercially feasible.
“The DOE has to look
for different alternatives as far as the sourcing of energy is concerned. The
mandate is we’re supposed to give a recommendation to the secretary by the end
of the year.”
Service Contract (SC) 38, the license that allows the exploration of the
Malampaya gas field in northwest Palawan, will expire in 2024 but this can be
applied for extension with the DOE.
Shell Philippines
Exploration B.V. (SPEX), a local unit of energy giant Royal Dutch Shell, leads
the Malampaya consortium with 45 percent; Chevron Malampaya LLC (45 percent)
and PNOC EC (10 percent).
The SC 38 consortium
expressed interest to extend its license to explore for oil and gas in
northwest Palawan until 2039, but was stalled due to tax issues.
With the PNOC EC study,
the DOE is hopeful the uncertainty of gas supply from the Malampaya project
would be cleared out.
“The priority is if we
will not extend (the contract of Malampaya), we might as well allow PNOC EC,
which is already part of the consortium, to take over,” Pulido said.
While the DOE is
fast-tracking the decision on the operation of the Malampaya project, Sen.
Sherwin Gatchalian is not cool to the idea of PNOC EC taking over the gas field
since the government is inherently not a good operator.
“Personally, I am not
confident the government can operate it properly. We have a bad history of
operating projects, if you look at MRT, LRT, and the airports,” he said.
Another thing to
consider is PNOC EC’s technical capability to operate the gas project, said
Gatchalian, who chairs the Senate Committee on Energy.
However, the DOE
official said the agency needs to look at other options to secure gas supply
for the country’s gas-fired power plants.
“We will find another
source like Malampaya in the future especially once the geopolitical situation
stabilizes,” Pulido said.
Operating since 2001,
the Malampaya gas project supplies fuel to around 40 percent of gas-fired
plants in Luzon namely the Ilijan, Sta. Rita plant, San Lorenzo, San Gabriel
and Avion plants — which supply 3,211 MW to the Luzon grid.
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