DOE backs proposed gas aggregation framework

MANILA, Philippines — The Department of Energy (DOE) has expressed its support to the proposed gas aggregation strategy of Enrique Razon’s Prime Infrastructure Capital Inc. and Lopez-led First Gen Corp.

Energy Secretary Raphael Lotilla said the proposal could help cushion the impact of a surge in prices of liquefied natural gas (LNG) brought about by the Russia-Ukraine war as natural gas from the Malampaya gas field can be aggregated with imported LNG.

“That’s what we are trying to prevent from happening in terms of spikes in the price of imported LNG and the plan is to blend the lower price of Malampaya natural gas with the imported LNG so that we can soften the impact or the volatilities of imported LNG,” Lotilla said in an interview with One News.

“By 2026 or 2025, if we are lucky, there will be more LNG supply coming on stream globally and therefore the expectation is that prices of LNG will soften as well,” he said.

Prime Infra and First Gen are in discussions to develop a gas aggregation framework, which will make it possible to blend extracted volumes of indigenous Malampaya gas with imported LNG.

The framework is expected to provide the lowest cost possible for consumers and also bring these benefits such as enhanced energy security and competitive market for power generation, while also complementing ongoing commercial development of new indigenous natural gas fields.

First Gen is developing an integrated LNG and regasification terminal at its complex in Batangas City.

Prime Infra, on the other hand, is a member of the Malampaya consortium through subsidiary Prime Energy Resources Development B.V.

The company holds a 45 percent operating stake in the Malampaya gas-to-power project.

Lotilla said the coming in of LNG complements efforts to drill new wells near the Malampaya field because the gestation period for the full development of all the other alternative gas fields would take some time.

“The importation of LNG will therefore secure the gas supply for the Ilijan and the First Gas plants in the meantime that we don’t have sufficient natural gas supply from Malampaya,” the energy chief said.