Energy Sec. Alfonso Cusi has welcomed what it describes as Prime Infra Holdings’ possible entry into the Malampaya gas-to-power project after the Enrique Razon-led firm said on Thursday that it was set to acquire a controlling stake in the asset from Dennis Uy’s Udenna Corporation.
“The potential entry of Prime Infrastructure, owned by Mr. Enrique K. Razon, Jr., as a partner of the Udenna Corporation – which is in the process of purchasing Shell Philippines Exploration B.V. (SPEX), is a positive development not only for the Malampaya consortium but also the power sector as a whole,” Cusi said in a statement.
“Their involvement could further improve the financial standing and technical experience of the consortium, and more importantly, facilitate the progress of much needed and urgent development of Malampaya, given the depleting reserves in the existing wells,” he added.
At the current rate of depletion, Malampaya – which is expected to run dry by the first quarter of 2027 – would be able to provide 1,000 megawatts (MW) of power by 2024, as against 3,000MW in 2021, according to Cusi.
“Should the negotiations push through, the [Department of Energy] looks forward to SPEX continuing as the operator of Malampaya and rapidly progressing with the urgent drilling activities required to further develop Malampaya and arrest the depletion,” he said.
Aside from acquiring the controlling stake, Prime Infra said that it plans to apply for the extension of Malampaya’s Service Contract 38.
Cusi said that the keen interest of investors in the Malampaya project proves that the service contract remains to be “economically viable, and presents an attractive investment opportunity for the upstream oil and gas industry.”
Udenna acquired 45% of Malampaya from Chevron in March 2020, which the DOE approved in 2021. The Uy-led firm later bought SPEX, which holds the other 45%. PNOC-Exploration Corporation owns the remaining ten percent on behalf of the government.
Outgoing Senate Committee on Energy chairman Sen. Sherwin Gatchalian earlier expressed concerns about Udenna selling Malampaya’s controlling stake, which he said is “putting the country’s power situation on the line”