DoE eyes expanded gas production

The Department of Energy is expecting Prime Infrastructure to expand gas production and possibly develop other nearby resources once it officially starts taking over the 45-percent stake of Shell Philippines Exploration B.V. in the Malampaya gas-to-power project.

At a press conference on Wednesday, Energy Secretary Raphael Perpetuo Lotilla said the government’s approval of the sale of Shell’s interest in Service Contract 38 went through rigorous review.

“The approval by the DoE of the sale of Shell ‘s interest in SC38 of Malampaya was premised also on the commitment of the new entrant to maximize the development of the existing resources in the Malampaya Camago reservoir to develop the nearby fields as well,” Lotilla told reporters.

“The new entrant is committed to maximizing the utilization of the remaining natural gas in the Malampaya-Camago reservoir to develop nearby gas fields,” he said.

Lotilla added that the government’s strong commitment to maintaining the stability of the upstream oil and gas sector will attract more foreign and local investors to come.

“I am confident that this trend will continue as we reaffirm to prospective investors the openness of our economy to foreign and local investors,” he said.

The DoE cleared the sale last month after Prime Infra was found to be technically, financially, and legally qualified to take over the natural gas facility as the new operator of Malampaya.

Under the deal, SPEx will remain as a subsidiary of Prime Infra, which will assume full ownership and control of SPEx upon completion by 1 November of the process for the safe and seamless turnover of operations from Shell.

Prime Infra vowed to contribute by doing all that it can to produce as much gas as possible to sustain production in support of the power demand in Luzon.

Before the DoE approval, the sale of SPEx shares to Prime Infra had been given consent by the Malampaya consortium and PNOC Exploration Corp.

The Malampaya project is one of the country’s most important power assets, producing natural gas for power plants in Batangas City that provide up to 20 percent of Luzon’s total electricity needs.

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