Philippines acquires ‘significant’ natural gas storage facility in Malampaya East-1
By Chloe Mari A. Hufana again Sheldeen Joy Talavera, Journalists
The PHILIPPINES did theirs the first major discovery of natural gas in more than a decade, the development which can strengthen the domestic energy supply and increase support the demand for power, President Ferdinand UR. Marcos, Jr. said on Monday.
The reservoir, named Malampaya East-1, is about 5 kilometers east of the Malampaya gas field near Palawan province.
“This additional resource can help support the government’s efforts to strengthen our capacity,” said Mr. Marcos in a video posted on his Facebook page.
In a statement on Monday, Razon-led Prime Energy Resources Development BV, which is working on the Malampaya deep water gas-to-power project, said the newly discovered area will hold approximately 98 cubic feet of gas in the area.
This finding is equivalent to approximately 14 billion kilowatt hours of electricity per year, enough to power approximately 5.7 million homes, 9,500 buildings or approximately 200,000 schools annually.
Initial tests showed the well was flowing about 60 million cubic feet of gas per day, a rate Mr. Marcos said it is comparable to the original Malampaya wells and shows strong production.
The discovery also includes condensate, a high-value liquid fuel that can continue to support stabilization efforts electricity, said Mr. Marcos.
The Philippines relies on imported electricity and coal to power its power plants and industrial estates, leaving the economy vulnerable to fluctuating global prices and supply disruptions.
The discovery of new reserves in Malampaya East‑1 provides a rare relief, which could reshape the country’s energy landscape. He is expected to expand Malampaya’s role in the nation’s electricity integration and strengthen domestic gas supply in the coming years. It is also expected to help the Philippines reduce its dependence on coal.
Mr. Marcos said the drilling was led by Filipino engineers and was completed without any accidents or environmental incidents, stressing what he described as resource development.
Malampaya East-1 is the first well completed under the Phase 4 Malampaya Drilling Campaign, which also includes the Camago-2 and Bagong Pag-asa wells.
The next steps include the completion and exploration of Camago-3, followed by the drilling of the Pag-asa exploratory well for further gas resources.
By 2023, the Malampaya consortium – made up of Prime Energy, UC38 LLC, Prime Oil & Gas, Inc., and state-owned company PNOC Exploration Corp. – received a 15-year renewal of Service Contract No. 38 to the government, paving the way for the exploration and development of additional gas resources in the gas reserve39 until D20 begins the construction of the gas reserve. a year.
“When we started working, we made a commitment to the President and the nation to breathe new life into Malampaya and revitalize the traditional natural gas sector. Today, we are fulfilling that commitment,” said Prime Energy.
Phase 4 of Malampaya has been approved as a “power project of national importance” by the Department of Energy (DoE), making it eligible for expedited permit processing benefits.
“Natural gas is a critical bridge in our energy mix, supporting energy reliability while balancing renewables, energy storage, and grid development,” said Energy Secretary Sharon S. Garin.
“We will pursue this opportunity ethically: to grow the population of the Philippines, to support the preservation of the environment, and to ensure that every milestone strengthens our national interest,” he added.
The DoE said it will continue to work closely with the consortium and the relevant agencies in moving forward with the next steps – from technology assessment, development planning, and all necessary regulatory and environmental requirements.
GOOD NEWS
The availability of gas is “definitely good news for the Philippines,” according to Rizal Commercial Banking Corp.’s Chief Economist. Michael L. Ricafort.
He said these additional reserves will help increase the country’s supply and reduce reliance on imports of fuel and coal, which may lower electricity prices and ease inflation.
“[This will] it basically helps to increase local resources and lower prices… [as well as] to help lower local electricity prices and slow inflation,” Mr. Ricafort said via Facebook Messenger, adding that natural gas is a cleaner energy source compared to coal.
Edgar Benedict C. Cutiongco, president of the Philippine Petroleum Association, said the confirmation of the discovery of natural gas in Malampaya East‑1, has also been found.fenhances the country’s national power and strategic value upstream oil and gas development.
“Indigenous gas reduces dependence on foreign countries, stabilizes responsible energy, and protects consumers from fluctuations in global prices. These findings strengthen long-term supply planning and support a balanced energy transition,” said Mr. Cutiongco told BusinessWorld.
He said the key findings point to “continuity of regulation, geospatial opportunities, and longevity of infrastructure,” which are key factors in attracting capital to the Philippines.
“The discovery of Malampaya East is a milestone that improves national energy security, revives rising activity, and strengthens the Philippines as an investable energy market,” he said.
University of Asia and the Pacific Associate Professor George N. Manzano said having a domestic source of gas for power plants would make in the Philippines they are less vulnerable changes in fuel imports and movements in exchange rates.
“It can also act as a buffer when the world’s power is disrupted – for example, during world conflicts or other shocks,” he said of Viber.
Mr. Manzano noted, however, that the transition to commercial operation will take time, and the extent of consumer relief will depend on whether cost savings are passed on to consumers through lower electricity prices.
Juan Paolo E. Colet, managing director at China Bank Capital Corp., said the additional supply from the new gas storage facility should help make domestic gas-fired power plants more affordable.fstrong and competitive, which can be converted to cheaper and more reliable electricity.
“The latest discovery may stimulate investors’ interest in other potential natural gas fields in the Philippines,” he said in a Viber message. “There are large local banks that are ready to support this sector.”
Peter Louise D. Garnace, an equity research analyst at Unicapital Securities, Inc., said large gas discoveries are “a much-needed bridge fuel” as the country transitions to clean energy.
“With this ‘proof of life,’ we expect this success to trigger a new wave of exploration, increasing interest in the service contracts recently received by the Department of Energy as investors seek to replicate this win,” he said of Viber.
