Government-owned Power Sector Assets and Liabilities Management Corporation (PSALM) plans to draw more natural gas from the Malampaya field in Palawan.
Back in June, PSALM signed a memorandum of understanding (MOU) with fellow state-owned firm Philippine National Oil Company (PNOC) for the possible sale of “banked gas” from Malampaya. PNOC, through subsidiary PNOC-Exploration Corporation, owns ten percent of the Service Contract (SC) 38 Malampaya consortium on behalf of the government.
To date, there has been no development since the MOU since it was signed on June 7. This is also given the sudden passing of PNOC President Reuben Lista on August 31.
PSALM President and CEO Irene Joy Garcia said that under the MOU, PNOC would look into whether or not PSALM can retrieve the banked gas, and eventually buy it if successful in doing so.
The MOU, Garcia said, also states that PNOC would coordinate with SC38 on the possible retrieval.
“Banked gas” is defined by power industry officials as the accumulated and unused gas of the Ilijan plant due to transmission constraints, among other reasons. PNOC has been supervising the banked gas. Its volume, based on estimated, has dropped to 97.67 petajoules (Pj).
The PNOC board earlier authorized its management to enter into discussions or negotiations below the $6.616/Pj, as part of Ilijan’s gas and sale purchase agreement. The plant has a contract with SC38 that will expire in 2022.
PNOC bought 108.6 Pj valued at Php14.4 billion in 2009, of which 4.61 Pj was sold to PSALM in 2013 for Php937 million. It also sold 6.324 Pj to Shell in 2015 for Php2.5 billion.
