The Department of Energy on Friday welcomed the planned investment of tycoon Enrique Razon Jr. in the Malampaya natural gas project, saying it is a positive development in the energy sector.
Energy Secretary Alfonso Cusi said in a statement the keen interest of investors in Service Contract 38, notably from the Razon Group, bolsters the position asserted by the department that the Malampaya project remains economically viable and presents an attractive investment opportunity for the upstream oil and gas industry.
“The potential entry of Prime Infrastructure, owned by Mr. Enrique K. Razon Jr., as partner of the Udenna Corp.—which is in the process of purchasing Shell Philippines Exploration B.V.—is a positive development not only for the Malampaya consortium, but also the power sector as a whole,” Cusi said.
“Their involvement could further improve the financial standing and technical experience of the consortium, and more importantly, facilitate the progress of much needed and urgent development of Malampaya, given the depleting reserves in the existing wells,” he said.
Prime Infrastructure Holdings Inc. of Razon on Thursday announced plans to acquire a controlling stake in the Malampaya project, one of the largest and most successful commercial gas finds in the Philippines. Prime Infra said it was in talks with Udenna Corp. of businessman Dennis Uy for a controlling stake in the Malamapaya project.
Prime Infra said while Malampaya’s service contract would expire in 2024, the company aimed to continue operating the project while applying for an extension so it could invest in its expansion and sustain the economic and social benefits of the Malampaya project.
Cusi said one of the top priorities of the Department of Energy is the uninterrupted operations and supply of natural gas from the Malampaya project to ensure energy security especially as the global economy reels from the energy crisis brought about by the conflict between Russia and Ukraine.
The Malampaya project provides clean fuel to major power plants in Batangas province with combined capacity of more than 3,000 megawatts.
“Should the negotiations push through, the DOE looks forward to SPEX continuing as the operator of Malampaya and rapidly progressing with the urgent drilling activities required to further develop Malampaya and arrest the depletion.
Without which, at current depletion rates, Malampaya will only be able to provide gas sufficient for 1,000MW of power by2024 versus 3,000MW in 2021,” Cusi said.
Razon said Prime Infra plans to invest and sustain the development and production of domestic gas as long as the terms of the operating license and the natural resources permit.
