Malampaya sets ‘gas restriction’ schedules next year

Published November 24, 2021, 2:57 PM

by Myrna M. Velasco

The operator of the Malampaya gas field is scheduling at least four “production holds” or gas restriction occurrences next year, according to the Department of Energy.

“Based on the submitted document from SPEX (Shell Philippines Exploration B.V.), there will be four scheduled ‘production hold’ in 2022 with an equivalent of four days restriction per year,” the energy department said.

Beyond those anticipated “gas output hold” periods, the DOE admitted that it does not have any exact assessment as to the scale of production limit that the field will suffer next year, chiefly the ‘unscheduled output restrictions’ of the facility.

Nevertheless, the energy department indicated that “there will be much lower production rate expected in 2022 compared to the 2021 current production decline trend.”

To note, the Malampaya field had been afflicted with series of gas restrictions this 2021 – the longest was in March to June; then it recurred in September; and these snags in gas production resulted in tight power supply conditions in the Luzon grid, and had in turn triggered upticks in electricity rates billed to consumers.

For certain, the DOE emphasized that “gas restrictions are still to be expected in 2022,” although it qualified that such incidents will be “dependent on the available pressure and volume of the Malampaya Line Pack at a given day and the nominated quantity to the power plants.”

Last year’s gas restriction predicaments of the field prompted de-rating of the 1,200-megawatt Ilijan gas plant; shift to liquid fuels of the 1,000MW Santa Rita and 500MW San Lorenzo gas plants; and then shutdown of the 414MW San Gabriel plant because its technical design is not apt for it to change utilization to liquid fuels.

“With the current decline in production coupled with the gas requirement of the power plants, gas restrictions are expected in 2022 especially prior to the end of GSPA (gas sale and purchase agreement of Ilijan,” the DOE stressed.

The expiration of the Ilijan plant’s gas supply contract will be June next year; and its continued operation is expected to lean next on imported liquefied natural gas (LNG) that may reach Philippine shores starting second half of 2022.

Power utility giant Manila Electric Company (Meralco) is seeking definitive information on projected ‘gas restriction dilemma’ at Malampaya, that way, it can have warranted preparations – primarily on replacement capacity when the gas plants will not be available.

The utility firm previously laid down plans to undertake competitive selection process (CSP) for capacity off-take (purchase) that it can line up to plug supply gap especially when electricity demand peaks during the summer months and on next year’s election period.