Malampaya gas field’s normal delivery set to go back — SPEx

By Angelica Y. Yang, Reporter

SHELL Philippines Exploration B.V. (SPEx), the operator of the Malampaya gas-to-power project, expects the offshore natural gas field to go back to normal delivery levels by Tuesday evening.

Its assurance came after an extended gas restriction following a scheduled production hold, cutting off gas supply to some power plants in Luzon, including four facilities run by Lopez-led First Gen Corp., namely: the 1,000-megawatt (MW) Santa Rita, 500-MW San Lorenzo, 97-MW Avion, and 420-MW San Gabriel.

“Normal gas delivery levels [are] expected by this evening,” SPEx through the media manager for Shell companies in the Philippines told BusinessWorld via Viber on Tuesday.

“[The offshore platform is] already ramping up gas production,” it said, adding that Santa Rita “would start receiving gas this morning, per plan. Then increase Ilijan gas supply this afternoon.”

BusinessWorld sought comments from KEPCO Ilijan Corp., the consortium that operates and maintains the 1,200-MW Ilijan natural gas plant, but it has not replied as of deadline time.

SPEx said the Malampaya gas field previously undertook a planned production hold to prepare for the scheduled Malampaya maintenance shutdown next month. But it said there was a “slight delay” in the platform’s startup, which led to the prolonged gas supply restriction starting over the weekend.

In a disclosure on Tuesday, First Gen confirmed that over the weekend, the Malampaya gas field fully halted gas supply to First Gen Clean Energy Complex, which houses its four natural gas-fed plants.

“As a result, the Santa Rita and San Lorenzo plants have been operating using condensate as fuel while Avion has been using diesel. San Gabriel does not have dual-fuel capability and had to shut down because of the absence of natural gas supply from Malampaya,” the listed power firm told the local bourse.

It said it was hopeful that its plants could return to gas-fired operations soon after receiving word from the consortium behind Service Contract (SC) 38 that the gas field will gradually supply fuel to its facilities.

In a media release on Tuesday, Energy Secretary Alfonso G. Cusi asked SPEx to explain the gas restrictions that affected fuel supply to natural gas plants.

“These restrictions affect the electricity prices that consumers pay and they will have to be informed on the causes of price increases,” Mr. Cusi said.

He also instructed the Independent Electricity Market Operator of the Philippines to simulate the impact of gas restrictions on power prices, as well as the effects of the 20-day maintenance shutdown of the Malampaya field in October.

The Department of Energy said it would call a “coordination meeting” with SPEx, natural gas plant operators, distribution utility Manila Electric Co., and the market operator to address issues as well as concerns arising from the upcoming Malampaya shutdown.

Firms holding interests in SC 38 are SPEx with 45%; Udenna Corp. subsidiary UC38 LLC with 45%, and state-led Philippine National Oil Co. Exploration Corp. with 10%.