Prime Infrastructure Capital Inc. is seeking an extension of Service Contract No. 38 or the Malampaya deepwater gas-to-power project in northwest Palawan which is expiring in 2024.
This followed the completion by Prime Infra, through one of its subsidiaries, of its acquisition of the 45-percent operating stake in the Malampaya gas project.
Prime Infra said the next urgent step is to sustain and expand gas production in light of the growing electricity demand.
“As a purpose-driven company, Prime Infra is committed to investing in critical infrastructure that supports the country’s urgent needs. We are excited to be part of the next phase of Malampaya and to further the potential of SC 38 as we work on securing the license extension,” said Prime Infra president and chief executive Guillaume Lucci.
SC 38, located northwest off Palawan covering an area of about 830 square kilometers, was awarded to Shell Philippines Exploration B.V. on Dec. 11, 1990.
The Malampaya project is one of the country’s most important power assets. It produces natural gas to power plants in Batangas City that supply 20 percent of Luzon’s total electricity requirements.
The government earned revenues from Malampaya amounting to $11.9 billion as of December 2020.
Prime Infra, through Malampaya Energy XP Pte. Ltd. completed its acquisition of the 45-percent operating stake in the Malampaya gas project effective Nov. 1.
It assumed full ownership and control of Malampaya operator Spex which will be renamed Prime Energy Resources Development B.V.
“With great pride and honor, we welcome the Spex team to our Prime Infra family of companies. The Malampaya asset begins a new chapter today as we continue to build on the legacy of this world-class installation in helping achieve national energy security and independence,” said Prime Infra chairman Enrique Razon Jr.
Prime Infra’s full ownership of Spex is the culmination of the transition process for a safe and seamless handover of operations from Shell.
Prime Infra established a team of commercial, change management and upstream industry experts to facilitate the seamless transition of the asset operations from Shell.
A team of around 300 Spex world-class employees joins the Prime Infra group, bringing their highly specialized skills and technical knowledge that will continue to operate the deep water gas-to-power project.
Prime Infra management formally welcomed the Spex team at the Manila office, onshore gas plant, Batangas supply base and shallow water platform via a two-day onboarding activity capped with a hybrid town hall on Nov. 2 across all sites.
The Department of Energy approved the transfer of shares of Spex to Malampaya Energy XP in October.
The other joint venture partners in the SC 38 consortium are UC38 LLC, owned by businessman Dennis Uy with 45 percent and PNOC Exploration Corp., with 10 percent, also gave their consents to the sale.
Prime Infra said it is well-positioned to carry on the track record of Malampaya.
Prime Infra is Razon’s infrastructure arm that focuses on building assets that support the most urgent sustainability priorities – energy, access to clean water, waste management and viable critical infrastructure.