Malampaya production dropped by 31% in 2020

malampaya pna

The Malampaya gas field’s output took a hit from the economic slowdown caused by the COVID-19 pandemic, as it produced 107.902 billion standard cubic feet (bscf), down 30.6% from the all-time high of 155.495 bscf in 2019.

In a report by the Manila Bulletin, Shell Philippines Exploration B.V. (SPEX) noted that it produced less since demand from power plant-customers went low. SPEX is Malampaya’s operator.

The report adds that sources from Department of Energy (DOE) affirmed SPEX’s observation. Based on data from the department, the power sector’s gas usage from January-November 2020 had been at 101.347, a 30.8% drop from 146.365 bscf in 2019.
Power consumption nationwide plummeted by over 30% during the lockdowns in the summer months of 2020 with commercial and industrial establishments pausing or significantly reducing operations. While the economy began to recover with the easing of quarantine restrictions, many offices decided to implement work-from-home arrangements as a protective measure against the virus. On Thursday, the Philippine Statistics Authority reported that the country’s economy shrank by 9.5% in 2020, the worst contraction since World War 2.

SPEX also said that the scheduled maintenance shutdowns in First Gen Corporation’s San Gabriel and Sta. Rita combined cycle power plants contributed in the decline for demand.

Service Contract 38 of the Malampaya Consortium is set to expire in 2024. The consortium is currently working with the DOE to have the contract extended.
SPEX is planning to sell its 45% stake in the consortium. The MVP Group of businessman Manny V. Pangilinan, San Miguel Corporation of Ramon Ang, and Udenna Corporation of Davao-based tycoon Dennis Uy have expressed their interest to buy SPEX’s share. Udenna already purchased the other 45% from its original holder Chevron last year, while government-run Philippine National Oil Company owns the remaining ten percent.

Based on estimates that the DOE submitted to the Senate last year, Malampaya — the country’s first and only indigenous source of natural gas — can still produce up to 1.6 trillion cubic feet.