The government’s response, an administered pricing regime that has effectively suspended the merchant power market, has squeezed demand for gas-fired generation across the board, as regulators prioritize cheaper renewable and coal capacity.
Malampaya gas, Cruz notes, has weathered that squeeze differently. Its price, she calculates, is roughly less than half the cost of imported liquefied natural gas LNG in the current market.
That gap, combined with a legal framework that prioritizes indigenous gas utilization because it generates government revenue, has kept Malampaya’s offtake largely intact even as the broader gas market stalls.
It is, in her telling, a structural advantage rather than a lucky break: the country built rules that reward its own molecules, and in a crisis those rules are paying off.
Complimentary business
But she is careful not to consider this as an argument against LNG. Cruz also heads Prime Infra’s LNG importation and distribution business, and she describes the two as complementary rather than competing. Indigenous gas, in her view, is the anchor that makes the whole system function, a stable floor beneath a volatile import market.
Cruz keeps returning to what she calls a gas aggregation model: blending cheaper, steady domestic gas with LNG cargoes whose prices swing with global markets to produce a combined supply that is both price-stable and secure.
The logic is straightforward. Pure reliance on LNG leaves the Philippines bidding against Europe and the rest of Asia for a tightening pool of cargoes, made tighter, in her account, by the disruption to Middle East supply.
The blend, she argues, is the hedge. Prime Infra’s recent acquisition of a 60 percent stake in First Gen’s gas-fired power plants and LNG terminal, now rebranded Prime CoreGen for the power plants, with the terminal operated through Prime Infra subsidiary Gas Aggregator Philippines Inc. (GAPI), gives the company an integrated chain from wellhead to terminal to power plant, all physically connected to Malampaya.
That infrastructure, she said, is the foundation for eventually supplying blended gas not just to power generators but to industrial users across Luzon and beyond. She concedes the model is harder to sell today, with LNG prices elevated, but insists the strategic logic does not change with the cycle.
