Malampaya consortium secures supply deal

MANILA, Philippines — The consortium behind the Malampaya gas-to-power project has secured a long-term gas supply deal with subsidiaries of the Lopez-led First Gen Corp.

Enrique Razon’s Prime Energy Resources Development B.V., the operator of Malampaya, said the consortium has signed a gas sale and purchase agreement (GSPA) with the wholly owned subsidiaries of First Gen that own gas-fired power plants.

The new GSPA will continue the supply of Malampaya gas to the power plants with their gas supply contracts expiring in 2024.

Prime Energy said the deal would ensure continued supply of indigenous fuel to four gas-fired power plants in Batangas.

These four power facilities – Santa Rita, San Lorenzo, San Gabriel and Avion – have a combined capacity of 2,011 megawatts (MW).

The Santa Rita and San Lorenzo power plants have been using Malampaya gas since 2001, while the San Gabriel and Avion power plants started using Malampaya gas in 2017 after the completion of Malampaya Phase 2 and 3.

“This is a significant achievement that will contribute to the Philippines’ energy security. We are very grateful for the support of the Department of Energy, First Gen, and our partners in the Malampaya consortium in the successful negotiation and signing of the new GSPA,” Prime Energy managing director Donnabel Kuizon Cruz said.

Prime Energy and its partners in the project under Service Contract 38 are ramping up preparations to drill at least two deepwater wells in 2025 to potentially increase and extend gas supply from Malampaya.

Production from the new wells is expected in 2026.

The Malampaya deep water gas-to-power project supplies about 20 percent of Luzon’s electricity requirements.

President Marcos in May last year approved the renewal agreement for SC 38 which covers the Malampaya gas field.

This allows for the continued production of the Malampaya gas field and ensures that the remaining gas reserves are further explored and utilized until Feb. 22, 2039.