By Lenie Lectura - January 28, 2019
THE Department of Energy (DOE) is
asking the operator of the Malampaya gas facility to come up with a contingency
plan prior to the plant’s maintenance shutdown in October to avoid a spike in
power rates.
“Late November last year, I
asked Undersecretary Donato Marcos to write Shell and ask for the maintenance
schedule of Malampaya for 2019. We don’t like to be surprised again. They said
it would be in October this year,” Energy Secretary Alfonso G. Cusi said.
“What preparatory measures will be
undertaken? Will there be fuel for plants dependent on Malampaya? I told the
Service Contract 38 consortium, ‘Don’t we produce condensate?’ and they said
yes. So, why don’t they prepare for it now?” he asked.
A source from Shell confirmed a
scheduled maintenance shutdown (SMS) in the fourth quarter of the year that
will last less than a week.
“We want to make the shutdown
duration as short as possible to minimize the impact on the natural gas supply.
This shutdown is relatively short compared to previous ones,” the source said.
SC 38 was awarded to the Malampaya
consortium that operates the Malampaya Deep Water Gas-to-Power project, a joint
undertaking of the Philippine government and the private sector.
The project is developed and
operated by SPEX (Shell Philippines Exploration B.V) with a 45-percent stake on
behalf of joint-venture partners Chevron Malampaya Llc.—also with a 45-percent
stake—and PNOC-EC (Philippine National Oil Co.-Exploration Corp.), which holds
the remaining 10 percent.
The gas facility fuels the following
gas plants: the 1,000-megawatt Santa Rita, the 500-MW San Lorenzo, the 1,200-MW
Ilijan, the 97-MW Avion and the 414-MW San Gabriel.
Malampaya has been providing a
stable supply of energy, meeting 40 percent of Luzon’s power needs.
In previous maintenance shutdowns,
the plant uses alternative fuel to continue operation and generate electricity.
However, this is more expensive than natural gas. Natural gas as fuel only
costs around P4 per kWh, while replacement fuel, such as diesel, costs around
P6 to P8 per kWh.
The DOE is seeking other
alternatives that do not involve shifting from a cheaper source of fuel to a
more expensive one.
Unlike the Ilijan plant, the other
gas plants can use condensate to keep the plants running during the Malampaya
shutdown.
“So that there will be no
interruption, what’s in the contract? We are just looking forward to what can
happen and what can be done,” Cusi said.
The Shell source said that as per
contract agreements with gas-plant customers, Malampaya is allowed to do
scheduled maintenance shiutdowns without any obligation to supply alternative
fuel.
“Since we have advised our customers
and the DOE early, hopefully they are preparing early also such as already
sourcing their backup fuel,” the source added.
This year’s Malampaya SMS will cover
technical work at offshore platform (West Philippine Sea) and at onshore gas
plant (Batangas); repair of equipment; installation of critical spare parts;
and check of instrumentation and controls.
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