The country’s energy sector is gearing up for a “triple whammy” next year, especially in the peak demand months of summer due to high chances of continued forced outages, the derating of gas-fired power plants, and Malampaya’s dwindling reserves.
Senate energy committee chairman Sherwin Gatchalian, in a Manila Bulletin report, issued this warning, noting that the production of the gas field is already at its depletion stage and its output scale may become unstable next year.
Gatchalian had said that Malampaya’s resources would be completely depleted by 2027, based on data from the Department of Energy (DOE). It was also reported that the gas field’s supply may hit rock-bottom as early as next year.
The senator pointed out First Gen Corporation, which operates four of the country’s five gas-fired power plants, was not expecting that the depletion of Malampaya’s resources would be that fast. As a result, the Lopez-led firm had to partly shift to using condensate as fuel for its facilities.
Gatchalian, then, warned that the country’s power supply issues next year could worsen because of the problems in both the upstream and generation of plants, which is why he had been calling on the DOE to focus on the country’s energy security problems.
He added that the DOE must ensure as early as possible that the proposed floating storage and gasification units (FSRUs) that will bring in imported liquefied natural gas (LNG) would already be commercially onboarded by 2022 to fill the gaps in Malampaya’s output.
Gatchalian noted that even if there will be new drillings within the Service Contract 38 block, it will take long before commercial production is reached, which is why FSRUs are important as stop-gap facilities in ensuring the continuous operation of the gas plants.
Previously, it took the Malampaya consortium at least five years or from 2010 to 2015 to concretize a project — from the “cash call” phase to the commercial production of the new wells.
Gatchalian also said that if the gas plants’ generating capacity will be substantially derated due to gas deficiency from Malampaya, there could be power supply constraints for Luzon and that may result in longer or frequent rotating blackouts.
Gas technology is seen as the best complement to the on-and-off generation of renewables due to flexibility of their operations, so it is important that the country’s gas-fired generating facilities will run without any issues.
Udenna Group’s Malampaya Energy XP Pte. Ltd., which bought Shell’s 45% interest in Malampaya, recently admitted that the gas field’s supply is depleting and that it plans to drill new wells once the government approves the deal. Gatchalian, however, had warned that the approval may end up becoming a “midnight deal” of the outgoing administration.