Malampaya gas supply can last until 2029, but…

Malampaya gas supply can last until 2029, but…

The Malampaya gas project can still provide gas until 2029 but it would need to settle its tax dispute with the Commission on Audit (COA) to extend its contract.

“Based on what we know [and] depending on the drawdown, we still have supply until 2027 to 2029, within that range. So it’s not finished, zero in 2024,” Shell country manager Cesar Romero said.

Service Contract (SC) 38, which allows the exploration of the Malampaya gas project in northwest Palawan is set to expire in 2024 but can be applied for an extension with the DOE.

However, Romero said that the consortium would need to resolve its current tax issue with COA. Only then can Shell firm up its investments to extend the contract.

“We’re in discussions with the government on how it goes. So far, why it’s so difficult to think about these things is the COA case is still pending. It’s difficult to make concrete plans until you are able to sort out COA,” Romero said.

“Any action we think about at the moment is put on hold because we have to sort out COA first,” he said.

In 2012, the Malampaya went through a P1-billion expansion program which will maintain the level of gas production to meet the commitments under the existing gas sales agreements until 2024. This was completed in 2015.

However, COA upheld its 2009 findings in a decision that more than P50 billion were uncollected from the consortium operating the Malampaya project.

The Malampaya gas project supplies fuel to around 40 percent of gas-fired power plants in Luzon like the Ilijan, Sta. Rita plant, San Lorenzo, San Gabriel and Avion plants that account for 3, 211 megawatts (MW) in the Luzon grid