Gas-fired power plant operators have raised concerns over the ‘zero’ gas production rate at the Malampaya gas field which started last February 19 (Monday), because the shift to alternative fuels may trigger surge in electricity rates in the forthcoming billing cycles.

A source from the industry noted that their company already sent official correspondence to gas field operator Prime Energy to inquire on the lack of Malampaya gas output this week, because that will also extremely affect the operation of their generating assets.

With the extreme Malampaya gas restriction which already stretched for four days this week, the power plants were already compelled to shift to liquefied natural gas (LNG) which is more expensive compared to indigenous gas.

According to affected industry players, if zero or extremely reduced output at Malampaya will recur in this year’s El Nino-saddled dry months, consumers are already being cautioned on even heftier hikes in their electric bills; or worse, there could be disruption in electricity services.

Energy Undersecretary Alessandro Sales explained that “on February 13, shallow water platform (SWP) initiated normal plant shutdown to manage high gas export pipeline pressure owing to LNG commissioning activities at the First Gen plants resulting in very low Malampaya draw rates.”

He qualified that “during this time, Prime Energy discovered corrosion in a section of the SWP,” adding that “to maintain safe and secure operation at SWP, permanent repairs needed to be pursued.”

Sales further conveyed “due to resource availability and mobilization, repairs took some time, hence, the need to implement staggered gas supply restriction starting February 18.”

He specified that gas export from SWP already resumed and restriction is expected easing up on a staggered basis.

In the past incidents of gas restriction at the field, previous Malampaya operator Shell Philippines Exploration B.V. would forthrightly send advisories to its customers on what could have been precipitating such development in the field – including reports then of “low pressure at the line pack” of the production facility.

All scheduled maintenance shutdowns for Malampaya in the past were also being announced by the DOE; and planning for contingencies were similarly worked on months ahead.

Around 2019, the assessment of the previous Malampaya consortium-members will be for the gas field to reach depletion stage starting this year; but there had been recent pronouncements from the DOE that gas extraction from the field may still be feasible for several years to come.

More than 2,000 megawatts (MW) of power supply are still dependent on gas being lifted from the Malampaya field – these are the 1,000-megawatt Santa Rita, 500MW San Lorenzo; 414MW San Gabriel and 97MW Avion plants of the First Gen group.

In fact, to support the continued commercial production of the Malampaya field, a new gas sale and purchase agreement (GSPA) was recently signed between the Malampaya consortium and First Gen as the off-taker (gas buyer) – a move that will also underpin the planned new round of drilling to be pursued at Service Contract 38.

The 15-year extension for the operating license of the Malampaya gas field project was signed by President Marcos last year, and the new consortium which took over the asset had promised more than $600 million worth of investments to resuscitate the facility back into its robust production state.