Lopez-led First Gen Corporation confirmed that it remains very keen on buying the ‘banked gas’ that can still be extracted from the Malampaya field.

According to Jerome Cainglet, vice president of First Gen, “we have expressed our interest to purchase the banked gas for use of our gas-fired plants.”

He qualified that since the 2016 bidding set by the Philippine National Oil Company (PNOC), which is the government entity now owning the banked gas, First Gen continued “to be interested if PNOC will sell the banked gas.”

It was PNOC President and CEO Reuben S. Lista who indicated to Manila Bulletin that several parties still have standing offers to purchase the fuel – and he named First Gen, along with Phoenix Petroleum Philippines Inc. of businessman Dennis Uy and state-run Power Sector Assets and Liabilities Management Corporation (PSALM) as the prospective takers.

When PNOC attempted to sell the banked gas via bidding and negotiated sale processes in 2016-2018, it cornered tenders but there was never a final deal cemented because the price offers had been deemed lower than the target set by the government.

Lista previously apprised media that it will need to seek the approval of his company’s Board if the PNOC management will be allowed to negotiate for a price that would have been lower than the US$6.616 per gigajoule cost benchmark that had been anchored on the fuel supply for the 1,200-megawatt Ilijan plant.

Even with developments in the international market that had already driven gas prices to highly competitive levels, PNOC has not given any indications yet on any new negotiating stance that it will be pursuing so it can finally unload its banked gas.

That ‘stored fuel’ is part of the unfinished business for the Malampaya project – which is now facing major ownership changeover and well-anticipated contract lapse in 2024.

If PNOC can still tug its way into actively selling the banked gas, that could redound to additional revenue stream for the government which may be badly needed especially in the government’s Covid response.

But if the state-run company fails on its divestment plan, the ‘banked gas’ may turn out to be a wasted opportunity, primarily if the resource won’t be extracted prior to the expiration of Service Contract 38, which is the license of the consortium currently operating the gas field.