SMC disrupts nat gas sked
Under an independent power producer authority signed in 2010 in line with the privatization program at the time, ownership of the giant Ilijan natural gas facility transfers to the IPPA administrator after 12 years
Daily TribuneUnder an independent power producer authority signed in 2010 in line with the privatization program at the time, ownership of the giant Ilijan natural gas facility transfers to the IPPA administrator after 12 years
San Miguel Corp. is trying to disrupt the equitable process that the Malampaya consortium is following in the distribution of banked gas amid the depletion of gas reserves.
The supply covered by Service Contract 38 needs to be fairly distributed as the volume of gas from the Malampaya field as verified by the Department of Energy, is nearing maximum reserve drawdown, a Malampaya consortium insider explained.
Banked gas are the accumulated collectibles of the Ilijan natural gas plant, used to be owned by the government through the Power Sector Assets and Liabilities Management Corp.
Under an independent power producer authority signed in 2010 in line with the privatization program at the time, ownership of the giant Ilijan natural gas facility transfers to the IPPA administrator after 12 years.
SPPC thus became the proprietor of the power plant last June. Ilijan's supply contract, nonetheless, expire as a consequence of the change in ownership.
SMC has not renewed the supply deal and relied on the banked gas after paying $1.2 billion to PSALM which owns the banked gas right.
According to Philippine National Oil Co. — Exploration Corp., banked gas is the accumulated unused gas of the lIijan plant as a result of the underutilization of the plant's pirchases under the take-or-pay scheme between 2002 and 2007.
Under the scheme, a fixed quantity of gas is paid for by the power plant every year, whether or not they use the gas supply.
SPPC, nonetheless, insisted, in a statement, of having bought Malampaya banked gas owned by the government through PNOC for $1.2 billion.
SPPC signed a gas supply and purchase agreement worth P1.2 billion with PNOC for such banked gas last 23 June 2022, under the direct supervision of the Department of Energy, the PNOC board, and the Office of the Government Corporate Counsel.
While SPPC does not have a direct agreement with the consortium, it is PNOC on behalf of government that has an existing contract with SPPC.
Yet, in the statement issued by the Malampaya consortium to clarify the banked gas problem, among the signatories is PNOC
SPPC issues demands
The banked gas was originally paid for by the government in assistance to the state power plant operator National Power Corporation, the former owner of the llijan power plant, SPPC said in a statement.
In September 2009, state energy firm PNOC purchased from the Department of Energy all the rights, benefits and entitlements of the banked gas.
State holding firm PSALM drew banked gas in 2013 for the Ilijan plant and another portion was purchased by Pilipinas Shell Petroleum Corporation from June 2018 to January 2021 for its Tabangao Refinery.
Lopez unit First Gas, which also has banked gas claims with Malampaya, cornered the allocation for this year based on the consortium's schedule.
SPPC has been badgering the consortium to obtain its share but it was told by the group running the Malampaya field that First Gas has a live contract while SPPC does not hold any paper to compel supply of natural gas.
Nonetheless, the consortium said a supply contract for SMC's Ilijan power plant "is under consideration as additional gas volume is extracted."
That will happen likely after the consortium obtains an extension of the SC 38 which expires in 2024 since additional natural gas extraction will be possible through new exploration or redevelopment of the field.
The claim of SPPC that banked gas is being withheld delays the resolution benefiting all players, according to the source.
