Shell Philippines Exploration B.V., the operator of Service Contract 38 or the Malampaya gas project in northwest Palawan, announced the start of a 20-day maintenance shutdown on Saturday, as the government and industry stakeholders assured adequate power supply during the period.
Production from the Malampaya gas field declined to 79,054 million standard cubic feet as of September from 141,732 mmcsf in 2020. The bulk of the production this year went to power at 76,040 mmcsf, latest data from the Department of Energy showed.
“Preparations and contingencies are in place, including strict health protocols. This is a result of 12 months of planning with our gas plant customers and the Department of Energy,” Spex said.
Spex said the scheduled maintenance shutdown would ensure continued reliability of the Malampaya offshore and onshore facilities.
The DOE also assured there would be adequate power during the entire shutdown period and the agency would monitor the situation daily.
“There were no red flags raised by [our] bureaus,” Energy Undersecretary Felix William Fuentebella said.
Manila Electric Co. vice president and head of utility economics Lawrence Fernandez said the First Gas natural gas plants, which use the LNG from Malampaya, would be asked to run on liquid fuel during the period.
He said Meralco also asked the Energy Regulatory Commission about implementing the contract for the supply of electric energy with the Power Sector Assets and Liabilities Management Corp. for 90 megawatts beginning Sept. 29.
State-run PSALM manages the assets and liabilities of National Power Corp. under the Electric Power Industry Reform Act of 2001. “It will be up to PSALM on the actual plants to be used to supply Meralco,” Fernandez said.
The Independent Electricity Market Operator of the Philippines earlier said they were not expecting electricity prices due to rise during the Malampaya shutdown.
IEMOP chief operating officer Robinson Descanzo said about 4,000 MW of supply margin was expected from Oct. 2 to 22.
“As regards the price, we are seeing a trend, in September of about P3 per kWh. If we convert that to effective settlement price, that’s between P3 to P4 or even P4.50 depending on the strategy of the plants but still in the level of September prices or even lower,” he said.