PNOC urged to monetize Malampaya banked gas

Published July 30, 2018, 3:55 PM

by AJ Siytangco

By Charissa Luci-Atienza

The Philippine National Oil Company (PNOC) has been urged Monday to come up with a “comprehensive plan of action” to immediately dispose or monetize the Malampaya banked gas.

The call was made during the House Committee on Energy hearing on House Resolution 1737, which intends to look into the manner by which the Malampaya banked gas, which is at risk of being impaired by 2024, is going to be disposed of by the PNOC.

(MANILA BULLETIN)
(MANILA BULLETIN)

PBA partylist Rep. Mark Aeron Sambar, who authored the resolution, laments that since 2009, PNOC managed to sell only a small portion of banked gas, leaving a balance of 97.67 petajoules (PJ) of banked gas, which is approximately equal to 16 million barrels of oil and valued at P11.9 billion.

“Assuming that it is stranded and there is a play on both sides, para sa akin we can find a balance here. We are not telling you to sell the 97 petajoules at a low price nor wait for the perfect contract. If we are going to wait for that baka ilang beses na nagpalit ng leadership sa PNOC, naghihintay pa rin tayo, ” he said.

He asked the PNOC “to find a competitive price that would benefit the government.”

“Let’s find a compromise. Don’t count our chicken before the egg hatches. Tayo magiging stranded nyan. We need more comprehensive plan of action for this,” Sambar stressed.

He noted that the license for Service Contract (SC) 38 that allows the exploration of the Malampaya gas field in northwest Palawan will expire in 2024, coinciding with the time the gas reserves of Malampaya is expected to be depleted.

PNOC president and chief executive officer Admiral Reuben Lista said since he assumed office in November 2016, the government-owned and controlled corporation has been flexing its muscles to explore all means to sell, dispose or monetize the banked gas.

“Since then, continuous efforts were made to study, reassess, reevaluate, explore and exhaust all possible ways to sekk, burn, dispose or monetize the banked gas, ” he told the House energy panel.

He laments that the PNOC is unfortunately constrained to consider and sell to a limited market and for a limited purpose only.

He explained that the floor price for the sale of its banked gas should not be less than the current Ilijan price and that the terms and conditions of negotiations must be advantageous to the government and similar to the terms and conditions of the PNOC’s Gas Sale Purchase Agreement with the Service Contract 38 (SC38) Consortium.

Lista said the sale of banked gas to First Gen did not materialize due to non-compliance of the offered buying price from First Gen with the floor price as set by the PNOC Board.

“PNOC has been steadfast in finding ways to utilize the banked gas while promoting the growth of our country’s LNG industry. This gave birth to the government’s interest in aggressively pursuing an LNG Hub Project. In line with this, the banked gas was bundled along with a proposed 200MW army reserve power plant and/or the LNG Hub Project, ” he said.

“With the current administration’s shift towards a cleaner energy source and the DOE’s support to the LNG Project, PNOC is hopeful that this policy opens us to new opportunities and brings in new players to the industry, ” Lista said.

Sambar expressed concern that waiting for the LNG terminal or power plant to be put into operation by 2020, at the earliest, may “likely imperil” the banked gas considering that the Malampaya gas field is expected to be depleted by 2024.

Department of Energy Undersecretary Felix Fuentebella said the instruction of DOE Secretary Al Cusi is clear that “they will maximize whatever it is that the government” and they “will follow the process.”

 
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