Pilipinas Shell Petroleum Corp., the country’s second largest oil company, was awarded a partial volume of banked gas offered for sale by PNOC Exploration Corp. and Shell Philippines Exploration B.V.
Energy Department records showed that only Pilipinas Shell’s 110,000-barrel-a-day refinery qualified during the bidding held by the two members of the Malampaya natural gas consortium.
“There was only one qualified bidder that meets the supplier’s criteria which is the PSPC refinery that has been awarded the partial volume. The utilization of the said gas volume by PSPC will start in 2018,” the department said. It did not specify the awarded volume.
Sources said Shell was utilizing natural gas for the power requirements of its refinery. Shell is the sister company of Spex which owns a 45-percent stake in Malampaya gas-to-power project in Palawan.
Shell still had to undergo bidding for the banked gas after the government decided to offer it via a public bidding.
Spex officials earlier said the banked gas sale last year drew “basement prices” amid the low global oil price environment
“We’re working with the government. We are still making sure that we will be able to monetize it, to bring it to the power plants. We are aware that San Gabriel and Avion are just nearly completed. They are already going hot commissioning. We are sure there will be discussions on how to get gas to fire those new power plants,” Spex managing director Sebastian Quinones said earlier.
Quinones said there was a winning bid in the joint bidding for the banked gas located at the Malampaya natural gas field northwest off Palawan but it was of small quantity and drew very low prices.
“I would like to use the term that Secretary Monsada used and that we got basement prices, not floor prices. That’s why we obviously want to make sure that the government is also not impacted [by the low oil prices],” Quinones.
He did not disclose the winning bidder at that time, but he said the consortium members were still negotiating with other interested bidders.
Quinones said the sale of remaining natural gas would depend on “what the market is asking.”
The invitation to prospective investors for the banked gas earlier stated that Shell Exploration B.V, Chevron Malampaya LLC, PNOC Exploration Corp. and PNOC would jointly tender their respective gas volume entitlements under service contract 38.
The quantity of gas available was up to 227.995 petajoules with average daily quantity of up to 78.1 terajoules which was available for delivery from Jan. 1, 2016 and up to Feb. 23, 2024.
The banked gas is estimated to fuel a natural gas plant with a capacity of 400 megawatts.
“As we go forward, we obviously want the government to benefit also and also the consortium,” Quinones said.