Friday, November 8, 2019

Pilipinas Shell in talks with PNOC on sale of Malampaya banked gas


By Lenie Lectura  - November 7, 2019

Pilipinas Shell Petroleum Corp. (PSPC) is in talks with Philippine National Oil Co. (PNOC) for the sale of Malampaya banked gas, according to the state firm’s president.
PNOC President Reuben Lista said he was informed that PSPC is interested to purchase unused Malampaya gas, or more known as banked gas.
“Isn’t it that PSPC is buying? Magbebenta na naman si Glenda. Sila ang nag ne-negotiate. Di ba bumili sila ulit [Glenda is selling again. They’re negotiating. Aren’t they buying again?]” Lista said, referring to PNOC Senior Vice President for Finance and Administrative Services Glenda Martinez, whom he asked to confirm this.
Though there were discussions on this, Martinez said PSPC has yet to put its offer on the table. “It’s 2.7 petajules [Pj], pero wala pang presyo [but there’s no price set yet],” she said, while adding that PNOC’s previous computation on the value of banked gas reached $10.50 per Pj.
Lista said the ideal price for banked gas in the international market is $10.52 per Pj, “but we are selling it at $9.70 something.”
The total remaining banked gas is recorded at 97.67 Pj valued at $700 million to $750 million.
The PNOC board earlier authorized the PNOC management to enter into comprehensive discussions or negotiations below the $6.616 per Pj under the Ilijan gas-fired power plant’s gas and sale purchase agreement (GSPA). 
Ilijan power plant, one of the gas plants fueled by the Malampaya gas facility, has a contract with the Malampaya consortium that will expire in 2022. 
PNOC-Exploration Corp. (PNOC-EC), which is part of the consortium, bought 108.6 Pj in 2009 valued at P14.4 billion. Of this, 4.61 Pj was sold to the Power Sector Assets and Liabilities Management Corp. (PSALM) in 2013 for P937 million. 
PNOC also sold 6.324 Pj to PSPC in 2015 for P2.5 billion.
“Don’t worry about the banked gas, we will sell it at the proper time [when it will benefit the nation, instead of selling at $2.50 [when there’s no benefit],” Lista said in a mix of English and Filipino. He pointed out that “whoever puts up today an LNG power plant, aside from Ilijan and First Gen,” will have nowhere to turn to but “banked gas only” to buy cheaper gas.
He said earlier three firms have signified interest to purchase the remaining banked gas. He declined to identify them, as they have yet to submit a formal letter of interest. 
Earlier, Phoenix Petroleum and China National Offshore Oil Corp. (CNOOC) signed a memorandum of understanding with PNOC.
The MOU will allow the three companies to explore and discuss business opportunities and cooperation in relation to the equity investment in Tanglawan Philippine LNG Inc. and other companies relating to the project, PNOC facilities, market development, PNOC banked gas and future energy projects.
Tanglawan is a planned joint venture between Phoenix Petroleum and CNOOC Gas and Power Group Co. Ltd., China’s largest LNG importer and terminal operator. 
PNOC and Tanglawan are trying to find ways to maximize the remaining  banked gas.
First Gen Corp. is also putting up its LNG facility.

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