Malampaya gas production decline seen to continue – DOE

The Department of Energy (DOE) affirmed yesterday that ‘gas production decline’ at the Malampaya field will persist next year and until the project’s end of service contract in 2024.

Energy Secretary Alfonso G. Cusi specified that gas restriction had been lingering from January 2020 to September 2021, with him noting that “this decline was caused by the depletion of the Malampaya reserves and decreasing reservoir pressure.”

To recall, gas restriction had been extremely experienced within March to June this year; then it recurred in September prior to the gas field’s scheduled preventive maintenance on October 2 to 22.

“A decrease in reservoir pressure will decrease the quantity of gas being produced. Malampaya’s natural gas production is expected to continue to decrease,” the DoE chief reiterated.

Under the current scenario of the field’s operations, Cusi noted that the production life cycle of the Malampaya gas venture may last until 2027; although its Service Contract (SC) 38 will already lapse in 2024.

The ‘saving grace’ resorted to by the government then had been cornering investments in liquefied natural gas (LNG) import facilities – and the first two regasification units of Atlantic, Gulf & Pacific Co. Inc. (AG&P) and First Gen Corporation are due to reach commercial operations by second and fourth quarters next year.

The offshore LNG import facility of AG&P would feed on the gas needs of the Ilijan gas plant – both the existing 1,200MW gas-fired plant if turned over to the energy firm of San Miguel Corporation next year; and the planned 1,700MW combined cycle gas facility (also of San Miguel group), of which first unit will be on-line by 2023; and the second unit will be on commercial stream by year 2024.

For the First Gen LNG terminal, it will cater to the needs of its existing four gas-fired electric generating plants as well as its targeted expansion of 1,200MW capacity; plus, it will also be offering gas to third party users.

“Our foresight assures that the existing natural gas power plants will be fueled from the expected commercial operations of the AG&P and First Gen LNG facilities,” Cusi said.

He pointed out “developing our LNG sector will help us attain energy security; while supporting the objectives of the clean energy scenario indicated in our Philippine Energy Plan 2020-2040.”

The AG&P and First Gen gas import facilities are part of the six LNG projects approved by the energy department – that when all would be concretized, these will bring in investments totaling P51.2 billion.

“These LNG facilities will provide the country with an aggregate capacity of 21.66 mtpa for the gas supply requirements ready for the anticipated new natural gas power plants in our new PEP,” Cusi stressed.