The consortium-members of the Malampaya gas field will inject up to $800 million worth of investments to stretch the facility’s production life cycle, as anchored on the 15-year extension granted by the government on the project’s Service Contract (SC) 38.

As emphasized by Prime Infrastructure Capital Inc. President and CEO Guillaume Lucci, “we'll be spending over $750 to $800 million over the next couple of years to try to extend the life of Malampaya as far as we can.”

The figure is higher than the $600 million to $660 million earlier declared by the Department of Energy (DOE) as to the scale of investment that the reconstituted Malampaya shareholders will be coughing up to concretize their submitted work program to the government.

The Malampaya consortium already awarded two contracts valued at aggregate $114.9 million – the most recent was the $69.9 million drilling contract to American firm Noble; and the other was the $45 million contract for the procurement of long lead materials and offshore casing, then tubular goods as well as wellhead equipment.

Lucci reiterated “we have just contracted the drilling vessel that will come in next year and drill three new wells: two development wells and one exploratory well,” specifying that “Bagong Pag-asa will be the exploratory well.”

Prime Infra is the parent firm of Prime Energy Resources Development B.V. (PERD), which is the current operator of the Malampaya gas field. The other consortium-members are UC38 LLC of the Udenna Group of businessman Dennis Uy which holds the other majority stake of 45%; and state-run Philippine National Oil Company-Exploration Corp. (PNOC-EC) as the minority shareholder.

In a related development, Prime Energy reported that its production volume on Tuesday (April 16) surpassed gas demand as some plants had been on forced outages – including a power generating unit that has been feeding on Malampaya gas.

“The Malampaya offshore field was able to reliably deliver more than its export capacity as the Luzon grid was placed on red and yellow alerts on Tuesday (April 16) by the National Grid Corporation of the Philippines (NGCP),” the company said.

Prime Energy stated that gas production peaked at 290 million standard cubic feet per day (MMSCFD), which had been higher than the prevailing maximum capacity of 262 MMSCFD.

According to Prime Energy Managing Director and General Manager Donnabel Kuizon Cruz, “Malampaya was able to deliver on demand because all producing wells were available and there was sufficient reserve in the gas export pipeline.”

And as needed by the grid, the company executive indicated that on Tuesday, the field would have been able to deliver gas beyond its usual export capacity.

“The system reliability and availability of Malampaya in March was 100%. Malampaya has long maintained top-quartile reliability performance,” Cruz noted.

The Malampaya field is just currently delivering gas to the power plants of First Gen – but one generating module of its Santa Rita power facility with 264MW capacity was also on forced outage on Tuesday.

The First Gen plants comprise of the 1,000-megawatt Santa Rita; 500MW San Lorenzo; 414MW San Gabriel and 97MW Avion assets – and they account for 11.2% of the total installed capacity of 17,961.724MW in the Luzon grid.

Malampaya used to supply fuel for roughly 20% of Luzon grid’s electricity needs, but one of its previous major customers – the 1,200MW Ilijan gas plant – had already shifted use to imported liquefied natural gas.

As things stand today in the country’s power system, Cruz asserted that Malampaya will “continue providing dependable domestic gas supply especially in grid alert scenarios that could affect millions of Filipinos in Luzon.”