Malampaya banked gas award seen next year

MANILA, Philippines - The awarding of the contract for banked gas from the Malampaya deep water gas-to-power project in offshore Palawan would likely be made in 2016, the operator of the gas field said.

Currently, the sellers are reviewing the offers for the government auction of the so-called banked gas.

The joint government and private partner sellers of the banked gas have received a “sufficient number” of bids for the auction, Shell Philippines Exploration B.V. (SPEX) managing director Sebastian Quinones said on the sidelines of the 25th anniversary celebration of Service Contract 38 and the inauguration of the new Malampaya platform Monday night.

“We have tendered already, and the results have come in. We are reviewing (those bids),” he said, declining to disclose the number of offers.

From 12 interested firms, six local and international energy companies have pre-qualified to bid for the joint sale of the Malampaya banked gas, a source said last July.

Quinones noted awarding the contract may take place next year.

“This year, that’s the goal [for awarding]. But this year may not be, depending on how the situation goes because we need to discuss terms and the like,” he explained.

The sellers of the banked gas are Philippine National Oil Co. (PNOC), the government corporation tasked to develop the country’s oil resources, and the Malampaya consortium composed of SPEX, the upstream oil company of Shell; Philippine National Oil Co.-Exploration Corp.; and Chevron Malampaya LLC.

The government and its private sector partners announced the sale of the unused Malampaya natural gas in April, which is targeted to be awarded within the year and delivery to start in 2016.

In a notice published in early April, the joint sellers said  “quantity of gas available is up to 227.995 petajoules (GCV) and average daily quantity of up to 78.1 petajoules (GCV) per day, available for deliver as of Jan. 1, 2016 and up to Feb. 23, 2024.”

Originally, the government designated the banked gas as reserves for future use, particularly by the 1,200-MW Ilijan natural gas plant in Batangas, when the Malampaya gas supply runs out by 2024.

However, the government decided to sell the banked gas to power generation companies to augment power supply and avoid electricity shortage.