The Philippines is “in dire need” to import supplies of liquefied natural gas in the country as Malampaya project’s output is approaching depletion, according to Fitch Solutions.
Currently, the Philippines’ only source of natural gas is the Malampaya field. 15 percent of domestic electricity generation comes from the Malampaya, but the field is “rapidly declining [and] is widely expected to be depleted latest by 2027.”
The Department of Energy (DOE) is taking time to find alternative indigenous sources, while showing resistance to extending the Malampaya consortium’s service contract.
Malampaya field operator Shell Philippines Exploration B.V. (SPEX) earlier applied for an extension to their contract on Malampaya and is waiting for the DOE’s approval.
“The request for extension was submitted and it’s something for the government to decide. I think it was in late 2018, informing the DOE about our interest in having SC 38 extended,” SPEX managing counsel Kiril Caral was quoted in a Philippine Star report.
Meanwhile, Philippine National Oil Company- Exploration Corporation (PNOC-EC) earlier mentioned its intentions of continuing the Malampaya project without its present partners.
Fitch Solutions also noted that LNG prices should be low despite increasing output, particularly from the United States and Russia.
“From a price standpoint, the next few years is likely to prove an opportune time for the Philippines to commence LNG imports,” Fitch Solutions was quoted in a Philippine Daily Inquirer report.
“The Philippines has yet to enter into any LNG supply contracts for its terminals, and as such, will prove an attractive market for the growing legion of LNG suppliers globally,” it said.