THE Department of Energy (DoE) cited the renewal of the Malampaya service contract (SC) as one of its major accomplishments, adding that it remains focused on developing indigenous energy sources to stabilize the power supply.
In a report, the DoE said the renewal of SC 38 would allow full utilization of the Malampaya field, which is depleting and is estimated to hold 147 billion cubic feet in gas reserves.
“Further, this will kickstart the timely exploration and development of the in-field and near-field prospects which may provide additional reserves of around 210 billion cubic feet,” the report said.
SC 38, which covers the Malampaya gas field, was renewed until 2039.
The Malampaya gas field is considered vital to the energy sector as the Philippines’ only indigenous commercial source of natural gas. It is expected to be commercially depleted by 2027 with its supply expected to dwindle starting in 2024.
According to the DoE, the renewal agreement requires the consortium conduct a minimum work program which includes geological and geophysical studies and drilling of at least two wells.
“This firm work program is geared towards unlocking the potential both in the existing gas field and nearby prospect areas to provide incremental production,” DoE said.
The Malampaya Consortium is composed of Prime Energy Resources Development B.V., a subsidiary of Prime Infrastructure Capital, Inc. (Prime Infra), which has a 45% stake; UC38 LLC; and PNOC Exploration Corp., which own a 45% and 10% interest, respectively.
The DoE also said that it promoted “renewed confidence and strong interest” in the oil and gas industry by allowing Nido Petroleum Philippines Pty. Ltd., to proceed with the site survey and drilling locations in their service contract areas which include SC 6B and SC 54.
“These activities paved the way for the drilling of two wells (one exploration and one appraisal) to be conducted by the fourth quarter of 2023,” the report said.
SC 6B covers the Cadlao field which has an expected volume of about 6.2 million barrels of oil, while SC 54 in the Northwest Palawan basin, is thought to contain an estimated 15 million barrels of oil.
RENEWABLE ENERGY DEVELOPMENT
The DoE also said its RE development policies are in line with the international commitment to shift towards the development of indigenous and clean sources of energy. Last year, the DoE opened the renewable energy industry to full foreign ownership to help achieve its target of increasing the share of RE in the power mix.
The government is targeting to increase the share of renewable energy to 35% by 2030 and 50% by 2040.
“This advancement however is negated by a push for expensive energy from gas, both domestic and imported, with the pipeline bloated with fossil gas projects. These gas projects expose us to global market volatility while keeping RE from truly taking off. The DoE should decide (if) it wants to advance RE or entrench the dependence on fossil fuels. It can only go one way or another, not both,” Gerry C. Arances, executive director of Center for Energy, Ecology, and Development.
Meanwhile, the DoE also cited the development in liquefied natural gas (LNG) as one of the department’s achievements.
LNG, despite its price volatility, is being put forward as a solution to the looming power crisis due to the expected depletion of Malampaya.
“To maintain the adequate supply and mix of our natural gas supply, for the first time in the country we have not just one but two reception and regasification facilities for imported LNG. These facilities will support the gas-powered plants needed to stabilize the increasing volumes of variable RE and eventually even non-power uses,” it said.
The floating storage unit of Linseed Field Corp. started operating in July, resulting in the resumption of operations at the Ilijan natural gas power plant which has a capacity of about 1,200 megawatts.
First Gen Corp. has announced that it has secured a cargo of LNG, a significant development in its interim offshore terminal project.
Earlier, both Prime Infra and First Gen said they are jointly working to develop a gas aggregator business to streamline the distribution of natural gas from the Malampaya field blended with imported LNG.
“This alliance will enable a gas aggregation facility that will provide fuel to power the country’s natural gas power plants and enable them to continue running efficiently and reliably, (and) provide blended gas prices more favorable to power consumers,” the DoE said. — Ashley Erika O. Jose
