"We are looking very seriously into the possibility of laying a pipeline all the way to Sucat to bring this clean natural gas to Metro Manila," Spex managing director David Greer, said. Spex has expressed keen interest in providing downstream facilities for the Malampaya project.
Since Spex is the main operator of the $4.5-billion Malampaya gas project, it is expected that it would be also play a major role in the development of the natural gas in the downstream industry.
Upstream development in the oil industry involves oil exploration while the downstream sector includes retail and marketing of finished products.
"We are looking at, together with the Department of Energy (DOE), extending the pipeline," Greer said, adding that they are now holding exploratory talks with the DOE on this matter. "We already have preliminary discussions with the government," he said.
Greer said they are also discussing with DOE if it is still necessary to consider this venture as a separate project.
"Whether this would be a separate project depends on what agreements or arrangements could be put in place for downstream natural gas power stations," he said.
Aside from the DOE, he said they are also talking with various private and public partners for the downstream development of the natural gas industry.
"At the moment, we are in preliminary discussion with partners – PNOC (Philippine National Oil Co.), Texaco of US, Lopez-owned First Gas Corp. – and government to see what could be done," he said.
Greer said there is also a need to develop the market for natural gas. "Unless we have a market, there can be no pipeline. The market is dependent in the energy matrix of the country," he said.
He cited the advantages of developing the market for such kind of gas. "Natural gas is the cleanest hydrocarbon known to man. It is indigenously available so why import oil and coal if you already have your own natural gas?," he said.
Energy Secretary Vincent S. Perez earlier said there are at least three groups that are interested to construct the proposed onshore pipeline that would deliver the Malampaya natural gas to Metro Manila.
These groups include a Japanese group/consortium, the Lopez-owned First Gas and the Spex. Though Perez declined to identify the Japanese group, he said of the three, this is the most aggressive.
According to Perez, the government will allow only one pipeline since it would be uneconomical to have two pipelines.
"We can’t have two. There are many groups interested but at the end of the day, there could only be one pipeline because it does not make economic sense for two pipelines," he said.
The energy chief said the three groups are willing to establish a land-based gas pipeline from Batangas to Metro Manila, which is scheduled in January next year.
Next month, the natural gas from Malampaya platform in Northwest Palawan will be delivered via a 540-kilometer offshore pipeline to Batangas, where the three power plants are waiting to use the gas and convert it into electricity.
These power plants are: the Sta. Rita, San Lorenzo owned by the Lopezes, and Kepco Ilijan, a joint venture between Kepco Philippines Inc. and the National Power Corp. (Napocor).
The Malampaya field contains 2.6 trillion to four trillion cubic feet of natural gas that can fire up power plants with a total installed capacity of 4,000 MW for 20 years. The field also contains 80 million to 120 million barrels of condensate, which will be produced simultaneously with the gas.
As part of its effort to develop the utilization of natural gas in the country, the government has drawn up a number of strategies including the parallel development of distribution .