New natural gas depots needed as Malampaya terminal gets depleted

THE PHILIPPINES needs immediate alternatives for the loss of Malampaya natural gas to avert power outages in the next few years, a legislator said.

Senator Sherwin T. Gatchalian said in a statement Saturday that the energy sector is in a “race against time.”

“We’re racing against time. If we fail to act now, we could be experiencing anew debilitating rotational brownouts by 2024 once our supply from the Malampaya gas field is depleted,” he said.

Mr. Gatchalian said LNG terminals “should be in place” before the supply of Malampaya deepwater gas runs out.

The Department of Energy (DoE), which has also expressed its intent to allow the entry of natural gas imports, has received four applications for LNG terminal projects. The proponents are the Lucio Tan group alongside Blackstone Group affiliate Gen X Energy; First Gen Corp. and Tokyo Gas Co. Ltd.; US-based Excelerate Energy; and Energy World Gas Operations Philippines, Inc.

The Government is seeking to make the Philippines an LNG hub in Southeast Asia and is pursuing public-private partnerships to explore and develop indigenous natural gas.

In early September, the DoE promoted its investment guide to potential LNG investors at a webinar hosted by the United States Agency for International Development.

Mr. Gatchalian, who heads the Senate energy committee, filed a measure outlining a national policy and framework for the development and regulation of the midstream natural gas industry. Senate Bill No. 1819 governs the transportation, transmission, storage, and marketing of LNG.

“The proposed Midstream Natural Gas Industry Development Act will encourage private capital and foster an open and fair competitive market while at the same time ensure safe, reliable and environmentally responsible operation of LNG terminals,” Mr. Gatchalian said.

Year to date, the Philippines has produced 73,388 million standard cubic feet (mmscf) of natural gas, with consumption at 69,856 mmscf, according to the DoE.

The Malampaya project under Service Contract 38 is run by a consortium led by Shell Philippines Exploration B.V., which holds a 45% interest there. Dennis A. Uy-controlled UC Malampaya Philippines Pte Ltd. owns another 45%, while the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) holds 10%.

Last year, the gas field accounted for the generation of 3,200 megawatts of power, or 21.1% of the total. — Adam J. Ang

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