“Malampaya has proven that it can deliver when needed.”
Senator Pia Cayetano on a bright, sunny day flew to the Malampaya gas platform on June 28, 2024, just a day after heavy rains battered the offshore production vessel.
Inspecting the facilities and seeing them firsthand, the ocean-loving lady lawmaker fell in love with the mega gas production platform and its intricate operations. The Malampaya natural gas field, operated by SC 38 Consortium led by Prime Infrastructure Capital Inc. of tycoon Enrique Razon Jr., awed Ms. Cayetano and contributed to her understanding about the depth of the country’s energy problem.
The Malampaya production platform is an engineering marvel that cost $4.5 billion to build and install.
The field produces natural gas that is compressed and exported through a 504-kilometer pipeline to the Batangas onshore facility in Southern Luzon. Its offshore floating production platform is found in water 43 meters deep while its subsea wells lie at a depth of 850 meters.
Ms. Cayetano, the new chairperson of the Senate Committee on Energy, presumably does not want the the investments in Malampaya go to waste. She is optimistic that the full development of the country’s natural gas resources, including Malampaya, will turn the corner and make the Philippines a significant producer and enable it to catch up with neighboring countries
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Malampaya has proven that it can deliver when needed.
Malaysia, Indonesia, and Thailand as of 2022 were Southeast Asia’s top gas producers, according to the 2023 Statistical Review. Gas extraction in the region in one year alone reached 210 billion cubic meters—topped by Malaysia (41 percent), Indonesia (29 percent) and Thailand (13 percent).
The International Energy Agency (IEA) in a report said Southeast Asia’s annual gas production would grow by 50 billion cubic meters from 2030 to 2050. Indonesia and Malaysia will continue to be on top of the list.
The Philippines could soon join the list of these Asian gas producers and that is not a pipe dream. Ms. Cayetano’s visit to the Malampaya platform offered a peek into the potential of the Philippines’ only indigenous gas resource. It could become one of the country’s main energy sources and offer a lifeline amid geopolitical turmoils.
“When you experience this and you see the kind of investments that goes into ensuring energy security and energy reliability, you will be impressed,” says Cayetano.
The lawmaker will preside over the fate of a bill pending at the Senate that could give fruition to her belief that indigenous natural gas is a game-changer in the Philippine energy sector.
Senate Bill 2247, or the proposed Philippine Downstream Gas Industry Development Act, is an affirmation that the Philippines is blessed with gas and oil. President Ferdinand Marcos Jr. made it his government policy to tap natural gas as a transition fuel to keep power supply stable while renewables are being fully integrated.
The Department of Energy (DOE) concurred and endorsed SB 2247, which seeks to make indigenous, or local, natural gas supply a priority for use in power generation. The bill seeks to fill gaps in the further development of Philippine natural gas resources, as evidenced by the Malampaya field.
The bill will make it a state policy to buy Filipino gas first, a move that seeks to open the doors to a wave of investments in the Philippine energy sector. It specifically aims to encourage further the exploration of new natural gas fields and give local production priority over imported fuel, or liquefied natural gas, for power generation.
The bill justifies the continued operation of Malampaya field under Service Contract 38, which the Marcos administration extended by another 15 years. Prime Infra has committed to drill up to three new wells to extend the lifespan of the Malampaya field.
SB 2247, meanwhile, will lay the foundation for a truly Filipino gas industry that shields the Philippines from the need to import LNG at higher prices.
Malampaya has proven that it can deliver when needed. When power supply fell short on April 16, 2024, Malampaya gas sustained the operations of power plants that fuel 20 percent of the Luzon grid demand.
National Grid Corporation of the Philippines had to declare yellow and red alerts on power supply when generators were deemed unreliable for their supply.
SB 2247 will precisely offer stability and address this power deficiency.
“Reliability is you will have power 24/7, security is when you have access, and that is where indigenous [gas] comes in,” says Cayetano. “When we have our own source, that gives us more security. It’s very simple.”
Malampaya supplies about 20 percent of Luzon’s electricity needs and has significantly contributed to the nation’s energy independence since 2001.
“Our next big challenge is exploration and ensuring energy supply for the next 15, 20 years,” says Cayetano.
The Malampaya offshore gas field delivered more than its export capacity in April after the Luzon island was placed on red and yellow alerts.
Prime Energy said gas supply to customers peaked at 290 million standard cubic feet per day (MMSCFD). The total is against the current maximum capacity of Malampaya wells at 262 MMSCFD.
“When needed by the grid, Malampaya was able to reliably deliver even more than export capacity. Malampaya was able to deliver on demand because all producing wells were available and there was sufficient reserve in the gas export pipeline,” said Prime Energy managing director and general manager Donnabel Kuizon Cruz. “The system reliability and availability of Malampaya in March was 100%. Malampaya has long maintained top-quartile reliability performance.”
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