Indigenous fuel proved its worth during last week’s power shortfall when 39 generating plants all over the country shut down.
Luzon was spared from disastrous extended brownouts, mainly by power plants running from Malampaya natural gas.
Malampaya-fueled power plants supply 20 percent of Luzon’s electricity requirements.
It thus exceeded its export capacity or the usual output during the red and yellow alert periods, which somewhat stabilized the energy backbone operated by the National Grid Corporation of the Philippines (NGCP).
According to Prime Energy Resources Development B.V. (Prime Energy), the operator of Service Contract 38, which was recently extended for 15 years, indicated that gas supply during the critical shortage period reached 290 million standard cubic feet per day against the maximum capacity of the wells at 262 MMSCFD.
The production of natural gas has increased to allow the four power plants running on the indigenous fuel, Santa Rita, San Lorenzo, San Gabriel and Avion, to operate at full capacity.
The Malampaya consortium is composed of businessman Enrique Razon’s Prime Energy, Davao-based Denni Uy’s UC38 LLC, and the state-owned Philippine National Oil Company-Exploration Corp. Prime Energy, as the operating partner, is responsible for managing its daily affairs.
Government share from the project has reached more than P756 billion from 2001 to 2023.
Malampaya delivered on demand because all producing wells were available, and there was sufficient reserve in the gas export pipeline, Prime Energy managing director and general manager Donnabel Kuizon Cruz said.
“The system reliability and availability of Malampaya in March was 100 percent. Malampaya has long maintained top-quartile reliability performance,” she added.
That translates to the possibility that the field can continue sustaining its output, defying expectations that it is on the way to depletion.
Under a red alert, the grid has insufficient supply to meet demand, while a yellow alert means the capacity of power plants falls short of the margin for safety.
With the strength of the extended SC 38, Prime Energy committed to drilling two development wells in the deep seas in Camago and Malampaya and a third exploration well, Bagong Pagasa, approximately 15 kilometers north of Malampaya.
Prime Energy estimated that the whole process, from exploration to production, will cost the company P44.8 trillion, which would require new investors.
Prime Energy has awarded a P4 billion contract for the drilling vessel to dig the three new wells starting next year.
The drill will cover the Malampaya Phase 4 project. Noble, a North Carolina-based oil prospect services firm, will be its contractor.
Once natural gas is sourced within the Malampaya Phase IV, Prime Energy said it will install the pipelines connected to the existing production facilities.
Last month, Prime Energy also awarded contracts worth $45 million for the supply of Long Lead materials, Offshore Casing and Tubular Goods, and Wellhead equipment.
Malampaya Gas has been providing a reliable fuel source for more than 20 years, and estimates put the natural gas reserves at the same volume as the current wells.
The long experience in reliability should be compensated with incentives and new investments, one compelling reason being that the indigenous energy source is readily available.
Natural gas is there for the taking.
