Gatchalian warns of power outages with depletion of Malampaya field

Senator Sherwin Gatchalian, chairman of the Senate committee on energy, expressed concern over the imminent depletion of natural gas from the Malampaya field in northwest Palawan.

The $4.5-billion Malampaya-gas-to-power project is the second biggest source of electric power in the Luzon.

“We’re racing against time. If we fail to act now, we could be experiencing anew a debilitating rotational brownout by 2024 once our power supply from the Malampaya gas field is depleted,” Gatchalian said in a statement over the weekend.

Gatchalian said the absence of replacement fuel could threaten energy security and might lead to possible rotational brownouts.

The Malampaya project has been supplying fuel to the Luzon grid, providing about 21 percent of the national demand for electricity nearly for two decades.

The gas field is expected to run dry by 2024, although the Malampaya consortium earlier said gas supply might last until 2027.

The Malampaya consortium led by operator Shell Philippines Exploration B.V. is seeking for an extension of Service Contract 38 with the government to ensure additional gas supply.

Gatchalian filed Senate Bill No. 1819 to provide a national energy policy and framework for the development and regulation of the Philippine midstream natural gas industry.

He cited the power crisis in the 1990s when Metro Manila and several provinces in the Luzon power grid experienced rotating brownouts of up to four hours daily because of insufficient electrical generating capacity.

Gatchalian said a complementary law should be passed to cover the aspects of the midstream natural gas industry, including the transportation, transmission, storage and marketing of natural gas including liquefied natural gas.

The midstream natural gas industry covers companies that specialize in operating tanker ships or marine vessels to deliver natural gas to LNG terminals, pipelines or transmission systems and storage facilities.

Several local and foreign companies expressed interest in putting up integrated LNG facilities in the country. Such facilities include storage, regasification and transmission.

Gatchalian said the LNG terminal projects should be in place before the anticipated depletion of gas from Malampaya by 2024.

“The proposed Midstream Natural Gas Industry Development Act will encourage private capital and foster an open and fair competitive market while at the same time ensure safe, reliable and environmentally responsible operation of LNG terminals,” he said.

Gatchalian said the proposed legal framework for the midstream natural gas industry would also ensure consumer protection as it would mandate a transparent and competitive pricing of services.

Topics: Senator Sherwin Gatchalian , power outages , Malampaya field
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