The development of indigenous gas should remain an integral part of Philippine policy as it aids in lowering electricity prices in times of low supply due to bad weather conditions, an official from Razon-led Prime Energy Resources Development (Prime Energy) said.
Donnabel Kuizon Cruz, Prime Energy's managing director and general manager, said that indigenous gas is a great alternative for fuel supply as the power grid becomes vulnerable to weather and other disruptions.
"During the April heat wave when the Luzon grid was on yellow and red alert, Malampaya operated at close to 120 percent of its current system capacity,” Cruz said during a panel discussion on Tuesday.
She cited the Prime Energy’s Malampaya Deep Water Gas to Power Project in Palawan which delivered enough fuel to generate 2,000 megawatts or about 20 percent of Luzon’s total demand for electricity.
This, Cruz added, also allowed Luzon consumers to save 50 centavos to 20 pesos per kilowatt hour on their electric bills.
“Imagine what would have happened if this weather situation was a global situation and we couldn't even import liquified natural gas (LNG)," she said.
The Prime Energy official also said that indigenous gas helped in stabilizing electricity prices during the Russia-Ukraine conflict, saying that “Filipinos would have paid, on average, 25 pesos per kilowatt hour in fuel costs for using LNG, compared to only 6 pesos per kilowatt hour for using Malampaya.”
"By using LNG, we became more vulnerable to market shocks. Indigenous gas prices remain largely stable against these shocks. and therefore cushions our electricity bills from its adverse effects," she added.
The government is also getting 60 centavos off of every peso of net revenue or sales from Malampaya gas, amounting to $300 million to $500 million annually for energy development, Cruz said.
At the same forum, Energy Secretary Raphael Lotilla said that the government is pursuing a robust natural gas strategy for its transition to full renewable energy use.
“Successful exploration and production activities will not only contribute to the country’s energy security goals but also drive economic growth, create employment opportunities, and generate revenue stream. Ultimately, the Filipino people will be benefited,” Lotilla said.
“Exploration and development of these resources including the building of necessary infrastructure will certainly take time, making it essential to have a reliable energy transition source in the meantime. This is where LNG plays a crucial role, serving as a cleaner substitute for traditional fossil fuels and a more reliable source than renewable energy,” Lotilla added.
Service Contract No. 38 (SC 38), which governs the Malampaya project, was extended for another fifteen years until February 2039.