Malampaya consortium okays deferred payments for Napocor

The government has signed a $350-million deferred payment facility with the Malampaya consortium, giving the National Power Corp. the needed financial flexibility to fulfill its gas sales agreement in the $4.5-billion deep water gas-to-power project.

Energy Secretary Vincent S. Perez said Napocor and the Power Sector Assets and Liabilities Management Corp (PSALM) entered into the said agreement with the Malampaya consortium developing the natural gas project, the single biggest energy venture in the country.

The government, through PNOC-Exploration Corp., holds a 10 percent stake in the Malampaya gas development project in Northwest Palawan. The lead members of the consortium are SPEX and Chevron Texaco each with a 45-percent equity stake.

Perez said the signing implements an existing agreement among the parties under the Ilijan Gas Sales and Purchase Agreement (GSPA) signed in 1997.

The Ilijan natural gas power plant, a joint project of Napocor and Korea Electric Power Corp. (Kepco), sources its requirements from the Malampaya gas field.

The agreement was signed by Napocor president Rogelio M. Murga, PSALM president Raphael M. Lotilla, SPEX managing director and chief financial officer Peter van Driel, SPEX legal affairs manager Kiril Caral, Chevron Texaco Malampaya LLC president Karl Cottrell and PNOC-EC president Rufino Bomasang.

Perez said this facility agreement will be in effect until Dec. 31, 2009.

He added that the signing was a culmination of more than two years of negotiations between the government and the Malampaya consortium.

Perez also welcomed the development as an important accord that would provide financial relief to Napocor.

"We welcome the implementation of the deferred payment facility agreement as this will help provide much-needed relief for Napocor in dealing with its financial obligations," Perez said.

"The joint venture appreciates all the hard work and time spent by government and our customers in finalizing this agreement. As a partner of the Philippines in economic development, the Malampaya consortium is pleased to have been able to help the Philippines in this way," said SPEX’s government and external affairs manager Ding Roco.