Prime Energy Resources Development B.V. said Tuesday it exceeded its second-quarter target output because of efficient maintenance activities and equipment integrity in the Malampaya Deep Water Gas-to-Power project that contributed to higher sales, fulfilling the high gas demand during summer.
Energy production and supply to customers exceeded the Malampaya’s target, with gas sales in the second quarter reaching 280 million standard cubic feet per day, higher than the target of 274 MMSCFD.
“We are very proud of the excellent performance of the asset, enabled by the tireless commitment, ingenuity and proven capability of Prime Energy employees. We intend to maintain a reliable supply of indigenous gas to our customers while we continue the hard work of exploring for new sources to address the natural decline of the Malampaya gas field. We remain committed to being the partner of choice in providing energy sufficiency and security to the country,” Prime Energy general manager Donnabel Kuizon Cruz said.
Prime Energy, a subsidiary of businessman Enrique Razon’s Prime Infrastructure Capital Inc., owns the 45-percent operating interest in Service Contract 38 or the Malampaya gas project.
It operates under an all-Filipino management and staff and continues to show its capability and competence in operating and maintaining the Malampaya project to harness natural gas and provide safe, reliable and clean energy to Filipinos.
The Malampaya gas project in northwest Palawan supplies natural gas to power four generation plants in Batangas, with a combined capacity of 2,011 megawatts.
The Malampaya platform, pipelines and production systems went through a two-week maintenance work early in February 2023. Working in close coordination with the Department of Energy, the maintenance activities were completed with zero incidents.
President Ferdinand Marcos Jr. approved the renewal of SC 38 in May 2023, extending the project for 15 years or until Feb. 22, 2039.
The Department of Energy identified the renewal of the Malampaya service contract as one of the major accomplishments of the Marcos administration that focus on indigenous energy sources for reliable, stable and affordable electricity supply.
The DOE said in a report the Malampaya’s SC 38 extension is a key indicator of progress in the development of the natural gas industry.
It allows full production of the gas field in northwest Palawan through full utilization of its remaining reserves of about 147 billion cubic feet.
The DOE said this would jump start the exploration and development of other fields in the area which reportedly contain up to 210 billion cubic feet more of natural gas.
The contract extension also required the consortium to put in place a minimum work program for geological and geophysical studies and to drill at least two deep-water wells from 2024 to 2029.
“This firm work program is geared towards unlocking the potential both in the existing gas field and nearby prospect areas to provide incremental production,” the DOE said.
It said that with the renewal of the Malampaya SC 38, First Gen Corp. of the Lopez Group and Prime Energy forged an alliance that would allow Prime Energy to lease the FirstGen LNG terminal.
“This will enable a gas aggregation facility that will provide fuel to power the country’s natural gas power plants [beginning with the power plants of First Gen] and enable them to continue running efficiently and reliably, provide blended gas prices more favorable to consumers, make the country as more serious player in the highly competitive LNG global market, and bridge ongoing efforts to locate, develop and harness more indigenous natural gas resources,” the agency said.
Under SC 38, the Malampaya consortium will be remitting 60 percent of net proceeds from petroleum operations to the national government.
The consortium remitted more than $13.14 billion from October 2001 to December 2022.