Malampaya revives Philippine gas infrastructure

The return of Malampaya gas to the 1,200-megawatt Ilijan Power Plant is breathing new life into the country’s decades-old gas-to-power infrastructure, putting the restored Tabangao-Ilijan Pipeline back to work as the industry builds around both domestic gas and imported liquefied natural gas (LNG).

Indigenous gas is again flowing to Ilijan under a six-month interim supply arrangement between Prime Energy Resources Development B.V. and South Premiere Power Corp. (SPPC), restoring a key link in the infrastructure originally built around the Malampaya field.

The resumption was made possible by the restoration of the Tabangao-Ilijan Pipeline through the collaboration of Prime Energy, SPPC, PNOC Exploration Corp. and the Power Sector Assets and Liabilities Management Corp.

“Bringing Malampaya gas back to Ilijan is more than just a resumption of fuel supply. This milestone is about putting our existing energy infrastructure to work and making the most of the resources available to our country,” LNGPH President and CEO Yari Miralao said on Friday.

“By reconnecting indigenous gas to a major power generation facility through LNGPH, we are helping translate local energy resources into dependable electricity for Filipino consumers and greater resilience for the Luzon grid,” he added.

Under the interim arrangement, Prime Energy, operator of Service Contract 38, will supply Malampaya gas to SPPC from 1 September to 25 February 2027.

Ilijan was among the facilities that anchored the Philippines’ first indigenous gas-to-power value chain after Malampaya began commercial production in 2001.

“What we are celebrating today is not just the admission of Malampaya gas and the beginning of a new gas supply arrangement,” Prime Energy President and CEO Donnabel Kuizon Cruz said. “It is also the continued use of critical energy infrastructure that was built decades ago and maintained to serve the country’s evolving energy needs.”

Malampaya gas at Ilijan is expected to cut generation charges by about P0.36 per kilowatt-hour.

Over the past decade, indigenous gas has maintained a price advantage over imported spot LNG, with the gap reaching more than $4 per million British thermal units at various points.

The six-month deal could also pave the way for a longer-term supply arrangement between Prime Energy and SPPC as efforts continue to extend Malampaya’s productive life.

Malampaya Phase 4 is targeted to deliver additional domestic gas in the fourth quarter of the year.