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Cusi asks Shell to explain Malampaya supply cutback

Energy Secretary Alfonso Cusi on Tuesday asked Shell Philippines Exploration B.V., operator of the Malampaya field in northwest Palawan, to explain the cause of restrictions that affected the delivery of fuel to the natural gas power plants in Batangas province.

“These restrictions affect the electricity prices that consumers pay and they will have to be informed on the causes of price increases,” Cusi said.

The Department of Energy said the gas restrictions experienced over the weekend could adversely impact the consumers. The Malampaya contractual arrangements are covered by previous power supply contracts signed by Manila Electric Co., and represent pass-through costs shouldered by consumers.

Cusi asked the Independent Electricity Market Operator of the Philippines to simulate the impact of supply restrictions on prices. The Malampaya natural gas platform is scheduled for a maintenance shutdown from Oct. 2 to 22.

“While there is sufficient supply of electricity during this period, consumers need to know the effects of all these to their power bills,” Cusi said.

The DOE is set to call for a coordination meeting with the consortium operator, natural gas power plants, Meralco and market operator, to address all the issues including the scheduled Malampaya maintenance shutdown. “Your Department of Energy will continue to come up with actions that protect the interests of our consumers,” Cusi said.

Meanwhile, state-run Power Sector Assets and Liabilities Management Corp. wants an assurance from Philippine National Oil Company it could withdraw the Malampaya banked gas. PSALM president Irene Garcia said the company previously signed a memorandum of understanding with PNOC to acquire the banked gas.

The MOU, signed in June, involved the purchase of the banked gas from the Malampaya project by PSALM. “If there is a guarantee that PSALM can indeed draw the banked gas, PSALM will buy the banked gas. At the moment, we are still awaiting a confirmation from both PNOC and Malampaya on whether we can draw on the banked gas,” Garcia said.

“The concern of PSALM is whether we can really draw the banked gas. That’s the ultimate question there,” she said.

“The moment there is guarantee that PSALM can draw on the banked gas, that’s the time we will proceed to do the definitive agreement of the sale,” the PSALM official said.

The banked gas is the accumulated unused gas of the Ilijan power plant amounting to 108.6 petajoules, as a result of the underutilization of the plant’s take or pay quantity from 2002 to 2007.

The remaining volume of the banked gas is equivalent to 97.67 PK since PSALM withdrew 4.61 PJ in 2013 for the Ilijan power plant and another portion equivalent to 6.324 PJ was contracted to Pilipinas Shell Petroleum Corp. in 2016 for the Tabangao refinery.

Topics: Energy Secretary Alfonso Cusi , Department of Energy , Shell Philippines Exploration B.V. , Independent Electricity Market Operator of the Philippines
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