2026 Malampaya revival reckoned

Natural gas which is on a declining supply will likely be augmented by new wells by 2026.

State-run Philippine National Oil Company-Exploration Corp. or PNOC-EC,  is anticipating a "high success rate" for fresh finds that will be drilled and developed by the new Malampaya consortium.

During a budget hearing of the Senate sub-finance committee last week, PNOC-EC president Franz Josef George Alvarez reaffirmed the commitment of the consortium, now led by Prime Energy Resources Development B.V., to drill two new wells by 2025 to augment the country's natural gas resources.

"By 2025, we will drill two additional wells. If successful, by 2026 we will have additional production," Alvarez told senators.

"The probability of success is around 80 percent," he added.

Service Contract 38, which covers the Malampaya gas field, has been renewed for another 15 years but the government required the consortium to explore and drill at least two new deepwater wells in the first phase of its work program or 2024 to 2029.

Unlocking potentials

The extension provides the consortium the opportunity to unlock the potential of both the existing Malampaya gas field and nearby areas.

According to Alvarez, the total cost of the program was estimated to be $690 million spread over three years from 2023 to 2026.

PNOC-EC, as part of the consortium, will spend some P3.45 billion on the work program.

During the hearing, PNOC-EC proposed a budget of P11.94 billion for 2024 — P2.02 billion of which will be allotted for continuing Malampaya operations.

The Malampaya consortium is composed of Prime Energy, a subsidiary of Razon-led Prime Infrastructure Capital Inc., UC38 LLC, and PNOC-EC. Prime Energy has a 45 percent stake in the consortium.

The Malampaya project is one of the country's most important power assets, feeding natural gas to power plants in Batangas City that account for 20 percent of Luzon's total energy requirement.

The field near Malampaya is estimated to have an additional 210 billion cubic feet of gas.

From October 2001 to December 2022, the consortium has remitted to the national government more than $13.14 billion as net proceeds from Malampaya.