Prime Energy Resources Development B.V., operator of the Malampaya Deepwater Gas to Power project, said over the weekend it fully supports Senate Bill No. 152 which seeks to create a legal and regulatory framework on the development of the gas industry.
Prime Energy general manager Donnabel Kuizon-Cruz said the proposed Natural Gas Industry Development Act would help keep the drilling of new gas wells on track.
She said at a Senate hearing on the bill Thursday it would also protect consumer rights by encouraging transparency and competition in the gas industry.
“I’d like to convey our full support to this, and we believe it is very timely and relevant. We have to continue exploring for new gas, and we will need LNG [liquefied natural gas] to fill in the gap,” she said.
“While we are doing that, we need the LNG bill in order to allow all parties who are importing gas, or in our case—our proposal to also blend imported LNG with indigenous gas—to do this in a very organized way to protect consumers,” Cruz said.
“If we have bill that allows us to import in a way that there is the purview of the government on how much the price will be, how the industry will collaborate, then we can do that in a way that all are protected,” she said.
Prime Energy, which holds a 45-percent operating stake in the Malampaya consortium, committed to drilling at least two deep-water wells from 2024 to 2029 under its work program with the government.
The work program is designed to unlock the potential of both the existing gas field and nearby areas.
“After more than 20 years, production from Malampaya is dwindling and, therefore, there is an urgent need for us now to explore and develop a more indigenous gas sources,” said Cruz.
“We are embarking on projects to do that but we will need time to do that,” said Cruz.
Prime Energy teamed up with First Gen Corp. for a gas aggregation framework that would put in place an orderly system of gas distribution.
The framework will make it possible to blend currently declining volumes of indigenous Malampaya gas with imported LNG.
The partnership would have the Razon-led firm lease and operate the liquefied natural gas terminal of First Gen as part of the gas aggregation plan.
Supply of gas to power plants that use it as fuel would be rationalized under the gas aggregation plan, which is seen to result in stable rates for consumers.
Cruz said S.B. 152 would be key to this happening. “We believe this will enable a stable, clear and predictable regulatory framework that protects the interest, both of the investor and consumers,” Cruz told senators.
She said the bill’s enactment into law would “hopefully pave the way for a stable and competitive market where we will thrive and allow collaboration of all sectors involved.”
Prime Energy reported that output at Malampaya exceeded targets, with sales in the second quarter exceeding 280 million standard cubic feet per day against a target of 274 million.
President Ferdinand Marcos Jr. approved the renewal of Service Contract 38 for Malampaya, extending the project for 15 years or until Feb. 22, 2039.
