Malampaya group prepares next phase of project dev’t

KUALA LUMPUR – Global energy giant Royal Dutch Shell Plc is now preparing for the next phase of the Malampaya project in offshore Palawan with the drilling of two wells, officials said in a summit here.

On the sidelines of Shell Malaysia’s two-day Innovation Summit, Matthias Bichel, Shell director for projects and technology, said the company is now starting the compression plant for two wells it recently drilled as part of the next phase in the Malampaya project.

“We are working on the next phase in Malampaya. We have drilled recently two wells successfully, which add new resources to the base and we have just about started with the facilities for compression,” he told reporters.

He said the compression process would keep the gas flowing on the reservoir.

“That is a project we are working on and that is really to prolong the life of the feed. And I think that is an integral part in the upstream game,” Bichsel said.

Shell Philippines Exploration BV and its joint partners Chevron Malampaya LLC and Philippine National Oil Co.-Exploration Corp. (PNOC-EC) operate the deep water gas-to-power Malampaya project.

The $1-billion expansion of the $4.5-billion Malampaya power project involves two phases. For the second phase, this entails the drilling and development of two additional wells.

The third phase, meanwhile, involves the installation of the yard, as well as additional equipment and facilities. With an investment of $750 million, the second phase is targeted to be completed by December 2015.

Bichsel said the next step would be is to serve what the reservoir can deliver.

“If the reservoir can deliver more then decisions will be made,” he said.

In February this year, the Malampaya project proponents turned over $1.1 billion to the National Government.

The amount represents the government’s 2012 revenue from the pioneering natural gas project that supplies 2,700 megawatts or up to 45 percent of Luzon’s power requirements.

In 2011, the Malampaya consortium also turned over $1.1 billion to the government.

Bichsel, meanwhile, also stressed the importance of having a masterplan for the liquefied natural gas (LNG) sector, which Energy Secretary Carlos Jericho Petilla said may be in place by the end of the year.