Malampaya and beyond

The Malampaya gas-to-power project is another step forward in the world’s continuing search for cleaner and more environment-friendly fuels.

"The switch to a lessening of dependence from coal and other fuels to the cleanest hydrocarbon, which is natural gas, ushers in the dawn of a new era for the Philippines", said David Greer, former managing director of Shell Phils. Exploration BV.

SPEX is the developer and operator of the Malampaya project, which extracts natural gas from very deep waters in offshore northwest Palawan and transports it through a 500-kilometer underwater pipeline to Batangas. From there, Shell supplies natural gas to three power plants: the 1,000-megawatt Sta. Rita and 500-MW San Lorenzo plants of First Gas Holdings Corp. and the 1,200MW Ilijan plant owned by the National Power Corp. and operated by the Korean Electric Power Corp.

SPEX spent about $2 billion for the development of the gas wells and pipeline. The users of the natural gas from Malampaya spent another $2.5 billion.

Global award

Just recently, the Malampaya gas-to-power project was named among the "top ten best examples of sustainable development partnerships in action" by the World Summit on Sustainable Development. This is the first World Summit award for the Philippines. For this year, it is also the only such award given to an Asian country.

Natural gas has often been called the "green fuel". Although it is considered the cleanest fuel used for power generation, it remains a hydrocarbon. For this reason, environmentalists also call natural gas a "bridge fuel"– until renewable sources of energy like hydro, wind and solar have been fully developed to meet the world’s energy demand.

"Theoretically, natural gas can meet 40% of the country’s power requirements," said SPEX deputy managing director Facundo Roco in a "Virtual Exhibit" interview in Johannesburg, host of the recently concluded World Summit.

The World Summit gave high visibility to current issues surrounding the degradation of the environment. It also got the attention of different governments and businesses around the world on how they can help ensure that the world will still be a safe place for future generations to live in.

According to the September 2002 issue of Time magazine, "the need to diversify (from fossil fuels) is now more urgent…Global energy demand is expected to triple by mid-century. The earth is unlikely to run out of fossil fuels by then, given its vast reserves of coal, but it seems unthinkable that we will continue to use them as we do now for nearly 80% of our energy. It’s not just a question of supply and price or even of the diseases caused by filthy air. We know that global warming from heat-trapping carbon dioxide threatens to cause chaos with the world’s climate."

In its September 2002 issue, National Geographic added that "an estimated three million people die annually from the effects of pollutants that result from burning fossil fuels. Children in the developing world’s mega cities are the hardest hit, often inhaling two to eight times the amount of pollutants deemed safe by the World Health Organization."

Mandate

In developing Malampaya, SPEX’s mandate was clear–to ensure that there will be very minimal environmental and dislocation of affected communities.

"At the beginning, there were some organizations that were against the project. Because of continued dialogues, all the residents were on our side towards the end of the project," said Roco.

In keeping up with its business philosophy of sustainable development, SPEX gave skills and training programs, set up a high school for the parents and children, initiated a reforestation project and sponsored medical missions.

Ultimately, the success of Malampaya would be measured not only by its profitability but by the improvement in the lives and health of those it has directly and indirectly affected.