DOE supports gas aggregation framework proposal

DOE logo 2023

The Department of Energy (DOE) supports First Gen Corporation and Prime Infrastructure Capital Inc.’s strategy of gas aggregation, saying that it will help alleviate the blow of the increasing prices of liquefied natural gas (LNG) triggered by the Russia-Ukraine war. 

Prime Infrastructure Capital Inc. and First Gen Corporation are working to establish a gas aggregation framework that aimed to combine extracted volumes of Malampaya gas with imported LNG. 

Energy Secretary Raphael P.M. Lotilla emphasized that the strategy of combining the lower price of Malampaya natural gas with imported LNG would help stabilize the volatility of imported LNG, preventing price spikes from occurring.

By adopting this approach, consumers could expect reduced costs and would provide a more competitive market for power generation and enhanced energy security. Additionally, the framework would also offer support during the development of new indigenous natural gas fields. 

First Gen was one of the seven companies with LNG terminal projects in the country. Recently, the Lopez-led company secured an LNG cargo from Shell Eastern Trading Pte. Ltd.

Prime Infrastructure Capital Inc., through its subsidiary, Prime Energy Resources Development B.V., is part of the Malampaya consortium, along with PNOC Exploration Corporation and UC38 LLC. The company owns a 45% share in the Malampaya gas-to-power project. 

Lotilla clarified that the inclusion of LNG in the power mix would provide a stable supply for the Ilijan and First Gas plants, especially as the Malampaya field neared depletion. The industry was currently exploring new wells in proximity to the Malampaya field, but the development process would require considerable time.

Earlier, President Ferdinand R. Marcos, Jr. signed the extension agreement for the renewal of the service contract for the Malampaya gas field until 2039. 

According to Lotilla, the extension was crucial as it would facilitate collaboration in drilling new wells near the Malampaya field, despite its depleting resources.