Spex seeks buyers for excess Malampaya gas production

Shell Petroleum Exploration B.V (SPEX) is now holding talks with prospective buyers for the remaining 300-megawatt (MW) from the 3,000-MW Malampaya deep water gas to power project, a ranking company official said.

"We have to eventually sell it.  We have been talking with some parties," Spex general manager for external affairs Facundo Roco said.

Without identifying the interested parties, Roco said those who are eyeing to put up natural gas-run power facilities could be one of the potential buyers of the excess gas in the Malampaya project.

 He said the existing natural gas-fired power plant owners could also be interested. "They may need additional gas for expansion of their capacity," he said.

 Of the 3,000 MW, Spex has sold 2,700 MW to the following: 1,200-MW Ilijan Power Plant  of Korea Electric Co (Kepco) and National Power Corp. (Napocor); and 1,000-MW Sta. Rita and 500-MW San Lorenzo of First Gas Power Corp.

The 300-MW was supposed to go to San Pascual Co-generation project by a consortium led by Edison Mission Energy. But the construction of the plant did not happen due to the existing excess capacity in the power system during that time.

The proponents of San Pascual, however, have already signed a purchase power agreement (PPA)  with Napocor. Thus, it is already part of the renegotiations of independent power producers (IPP)’s PPA contracts with Napocor.

 The Power Sector Assets and Liabilities Management Corp. (PSALM) early this year planned to buy out the 25-year PPA contract of the Napocor with San Pascual and assign the contract to Sucat power plant. 

 The government had been working out the pre-termination of the contract of San Pascual with US-based Edison Mission Energy since September 2002.

 PSALM is created under Republic Act 9136 or Electric Power Industry Reform Act (EPIRA) to absorb all the assets and liabilities of Napocor.  It is also in-charge of the privatization and sale of IPP contracts of the state-run power firm.

 The 850-MW Sucat diesel-fired power plant is being envisioned to be converted into a natural gas power facility.