The government is not inclined to extend the service contract of Malampaya natural gas project operator Shell Philippines Exploration B.V. under the same terms, Energy Secretary Alfonso Cusi said Wednesday.
“There is no such thing as extension. If we both agree, with the other party possible, I have to study what is good for our country. That facility will already be owned by the country [at the end of the contract period]. I cannot agree on just extending the same terms. It will be owned by the Philippines. The landscape changes,” Cusi said during an interview after the Kapihan sa Manila Bay at Cafe Adriatico.
SPEX is the operator of SC 38 and owns a 45-percent stake in the Malampaya Consortium whose contract will expire by 2024. Other consortium members are Chevron Malampaya LLC with a 45-percent stake and state-run PNOC Exploration Corp. with 10 percent.
The Malampaya platform provides natural gas to the country’s five natural gas facilities with a combined capacity of more than 3,000 megawatts.
“The word extending if I’m going to extend it on the same terms and conditions, I will not because what I am saying is it has changed. It will be owned by the Philippines. It has been paid for and so the facility should become ours,” Cusi said.
Cusi said Spex should not ask for an extension but instead make an offer to the Energy Department.
“They [should] propose…An offer of extension is different…We are asking also for a proposal…We will look at that proposal,” Cusi said.
Cusi said the government could explore various options for the Malampaya natural gas project such as bidding out the facility to another interested investor with better terms, let Philippine National Oil Co. run it, hire a new operator or “hatever will be good for us.”
He said PNOC was studying and making an inventory of the availability of supply from the Malampaya gas project which was expected to start being depleted by 2022.
“2024 is end of contract, 2027 depletion of supply. That again is something that we’d like to ascertain by engaging a third-party to determine what will be left…I have to be certain because when we make a decision, we want to make sure that the basis is correct,” the energy chief said.