Senator Sherwin T. Gatchalian has set in motion the Senate deliberations on a bill that would further develop the natural gas industry, providing for a replacement of the Malampaya deep water gas-to-power project even before its supply runs out and avert possible rotational brownouts beginning 2022.
He said that Senate Bill No. 1819 was introduced in anticipation of the nearing depletion of gas output from Malampaya-Camago wells and that natural gas is a good transition fuel.
The Senate Energy Committee chaired by Gatchalian will conduct its first Senate hearing on the bill tomorrow.
“The output of the gas will start going down by 2024. The direction of the Department of Energy (DOE) is to encourage the private sector to build receiving terminals for imported liquefied natural gas (LNG),” he said.
“And because we haven’t discovered new sources of gas in our country, we have to resort to importing LNG just to make sure that those 3,200-megawatt gas-fired power plants keep on running,” Gatchalian explained.
The Malampaya project fuels five power plants which comprise 20 percent of the installed capacity of the Luzon grid, according to the 2019 Department of Energy (DOE) Power Statistics, and serves 53.75% of Meralco’s electricity demand.
In addition to the declining reserves is the expiration of Malampaya’s service contract in 2024.
The DOE issued a circular in November 2017 outlining the regulations to be followed by all stakeholders in the downstream natural gas industry.
Gatchalian, however, said the DOE’s issuance needs a complementary law to cover all aspects of the midstream natural gas industry which includes transportation, transmission, storage, and marketing of natural gas in its original or liquefied form.
“Owing to the intricacy of the midstream natural gas industry, a comprehensive legislation is needed to fill in the gaps and strengthen existing bridge policies in order to unlock the potential of natural gas as a vital source of energy for the country,” he pointed out.