Malampaya consortium to award excess 300-megawatt capacity next year

MANILA, Philippines - The Malampaya consortium will finalize the award of the supply contract involving the 300-megawatt (MW) excess capacity in Service Contract (SC) 38 next year.

“We may not be able to award it yet this year,” Shell country chairman Edgar Chua told reporters over the weekend. The bidding for the excess gas output is crucial in the expansion plans of some power generation companies.

Chua did not reveal how many companies joined the bidding but it was earlier reported that PNOC-Exploration Corp., First Gen Corp., Korea Electric and Power Corp. and Callandra Energy have expressed interest.

Shell Petroleum Exploration B.V. (SPEX) owns a 45-percent stake in the Malampaya project. Another 45 percent is owned by Chevron Texaco and the remaining 10 percent by state-owned PNOC-EC.

SPEX finance manager Jose Jerome Pascual III said they have to finish the internal evaluation of the offers before awarding them to the winning bidder.

“We’re still in the process of evaluating the bids. We still cannot say when we will finish evaluating since they are still subject to internal evaluation,” he said.

Pascual said it would take time for them to finalize the bid. “We still don’t know when we will finish. It’s really the economics whether it will add value to the government and for the consortium,” he said.

Currently, the Malampaya project supplies gas to three natural gas power facilities in Batangas-Ilijan, Sta. Rita and San Lorenzo, with combined capacity of 2,700 MW

PNOC-EC said it is interested to bid for the 300-MW to justify its Batangas-Manila pipeline project.

On the other hand, First Gen is bidding for the excess gas to support its plan to put up a 500-MW natural gas plant in San Miguel, Batangas, estimated to cost $400 million. The facility is adjacent to the existing Sta. Rita and San Lorenzo natural gas power facilities.

Kepco, meanwhile, is also waiting for developments in the sale in order to expand its natural gas facilities. KEPCO wants to expand its 1,200-MW Ilijan facility.

The $4.5-billion Malampaya project supplies 2,700 MW of power to three natural gas power plants and provides about half of the requirements of the Luzon grid and 30 percent of the entire power needs of the country.

To ensure that there is enough gas supply, Spex has raised the possibility of exploring the old San Martin gas field for gas production opportunities.

The old San Martin field is also included for expansion under SC 38, which allows the consortium to explore for oil and gas in Camago-Malaya in northwest Palawan. The San Martin area is estimated to contain 232 billion cubic feet (BCF) of natural gas with 74 BCF in recoverable reserves.