The volume of gas that can be supplied by the Malampaya field will drop to 1,000 megawatts of equivalent power capacity in 2024, which is also the timeframe for the expiration of the project’s Service Contract (SC) 38, if no license extension is extended by the government.

According to Atty Raymond T. Zorrilla, spokesperson of Udenna Corporation, the production will continually dwindle and by 2024, it can just supply gas for at least six percent of generated power that would be fed into the Luzon grid.

“The asset (Malampaya) will only be able to service six percent of Luzon by 2024, unless immediate actions are taken to arrest the quick decline and prevent its eventual end by 2027,” the Udenna executive said.

That will be a downtrend from the current 20-percent of power supply that the Malampaya gas has been providing for the main power grid of Luzon. Current installed capacity of the gas plants stands at 3,211 megawatts.

In the acquisition by Udenna’s subsidiary-firms of the 90-percent shareholdings in Malampaya that had been unloaded by Chevron Corporation and Shell Philippines Exploration B.V. (SPEX), Zorilla insisted that “there is no law requiring approval of transfer of shares of companies that have interest in Malampaya.”

Zorilla thus stressed that “no party has the legal ability to rescind the Chevron and Shell transactions,” with him emphasizing that “Udenna as a key investor in UC Malampaya Philippines Pte Ltd will stand by this legal position.”

Udenna’s subsidiary, UC Malampaya Philippines Pte. Ltd., first acquired the 45 percent stake of American energy giant Chevron in Malampaya via a $565 million transaction that was closed in March 2020. Anglo-Dutch multinational firm Shell also announced in May the sale of its 45 percent shareholdings for $460 million to Malampaya Energy XP Pte. Ltd (another subsidiary of Udenna) and this deal is targeted for closing on or before end this year.

Zorilla argued “We, in Udenna, believe that UC Malampaya Philippines Ptd. Ltd. is clearly qualified than anyone else to become the shareholder of the prior Chevron company, and in the future, to become the shareholder of the existing operator, via Malampaya Energy XP.”

The Udenna executive asserted that in the acquisition of the Malampaya shares of the foreign players, “the very same experts who dedicated their knowledge and expertise and have been with Chevron and Shell for more than 20 years, are the same experts in the current management and operations in Malampaya.”

Upon the closing of the second acquisition with Shell, Zorrilla noted “what we aim to focus, and work on with the PNOC-EC (Philippine National Oil Company-Exploration Corporation), will be the most pressing issue of rejuvenating Malampaya.”

State-run PNOC-EC remains a minority shareholder in Malampaya and has been holding on to its 10 percent stake in the gas field project.