The Importance of Malampaya: A Story of Power



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Iris Gonzales – The Filipino Star

November 9, 2021 | 00h00

(Last of three parts)

MANILA, Philippines – The Malampaya Deep Water Power Generation Project is the biggest achievement in the Philippine power sector, as it marked the birth of the natural gas industry in the country.

There is no resource like this elsewhere in the country so far. It is without a doubt a matter of power.

Located 50 kilometers off the northwestern coast of Palawan, the Malampaya Project began commercial operations in January 2002 and brought in more than $ 12 billion in revenue to the Philippine government while supplying up to 20 percent of the country.s growing electricity needs.

The Malampaya project produced cleaner burning natural gas that powers five power plants in Luzon, the countrys largest island, with a combined capacity of 3,200 megawatts, according to the project brief.

“Malampaya benefits the country in countless ways, including reducing oil imports, ensuring a more stable supply of cleaner energy from a native resource and covering up to 20% of the country.energy needs, ”he said.

In 2013, the company embarked on phases 2 and 3 of Malampaya, which aimed to maintain the level of gas production to meet the commitments made under existing gas sales agreements, thus ensuring regular supply in natural gas to supply the Luzon electricity grid.

Two additional production wells were successfully installed in 2013 to signify the completion of Phase 2 of Malampaya. In 2015, Phase 3 of Malampaya, which involved the design, manufacture and installation of a new depletion compression platform, was completed. It is the first offshore platform to be fully built in the Philippines, improving local employment opportunities and bringing technical expertise to the country, according to the project brief.

Malampaya is an offshoot of the late dictator Ferdinand Marcos’ policy of developing and exploring indigenous oil resources following the 1973 oil embargo crisis, which was marked by long queues at stations -service, motorists having to refuel in a very limited supply of imported products. oil.

People got vouchers because supplies had to be rationed. Today’s seniors still vividly remember those days and nights when they stood in line at stations waiting for their tanks to be filled.

Decades later and with soaring imported oil prices, critics fear that if Malampaya ends up in “the wrong hands” the country’s energy security would be in jeopardy.

In the study

At the time of this writing, the Shell transaction is under review.

If the DOE ultimately decides to approve the deal despite the controversies that have arisen, it would have to prove that the deal is flawless, that no laws have been broken, and that Uy’s Udenna has not enjoyed extraordinary benefits. .

Energy Secretary Alfonso Cusi is optimistic he can wash his name and his department’s actions regarding Malampaya very well. He’s also ready to go to court to defend his decision, he recently told STAR.

He believes the allegations are politically motivated. He also hinted that disgruntled bidders were involved in the attacks on him. The Malampaya attracted more than 30 interested, local and foreign.

Others in the business world emphasize Uy’s closeness to Cusi. The DOE chief sold his Starlite Ferries to Uy a few years ago.

Asked about his supposed close friendship with Uy, Cusi said, “These are all my friends.”

worst case scenario

Going forward, any decision on the Malampaya accord would have an impact on the country’s energy situation.

Uy camp said delays in continuing operations of the Malampaya consortium would also mean a delay in rejuvenating the project. This could translate into a higher cost of electricity for Filipino consumers, as power plant operators would have to use imported fuel to run their plants.

At the same time, a former energy official said, handing Malampaya into the hands of a company with no exploration experience could also hurt the country’s energy security.

China could be interested in the project via Uy and with the Duterte administration’s intimate relationship with Beijing, China’s entry could pose an even greater threat to the country’s security, the former official said. ‘energy.

“This is our energy security and the overall security of the country,” he said.

Amid the uncertainty, a source working on the Malampaya platform said: “A lot of our operations engineers have left and during our recent 21-day maintenance shutdown, only 26% of the work initially schedule may have continued due to the delivery of labor / material. problems.”

The country’s energy plan

Beyond Malampaya and the controversies surrounding it, experts believe that the government must prioritize the discovery of new sources of clean energy, possibly the next Malampaya.

A former energy secretary said that beyond the acquisition of Malampaya, the Duterte administration still has not implemented a concrete energy plan, not even an energy mix.

The competitive selection process, which forces distribution utilities to source electricity at the lowest cost, should also be legislated, the source said.

The Philippine Energy Plan (PEP) 2012-2030 aims to provide the broadest population with widespread access to reliable and affordable energy services to fuel, above all, local productivity and rural development.

To do this, the exploration and discovery of indigenous petroleum resources must continue.

This is the only way for the people of the Philippines to be assured of the provision of safe, sustainable, sufficient, affordable and environmentally friendly energy to all economic sectors.

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