DOE outlines major gains in drive to energy security The youth and their expectations

By Lenie Lectura @llectura

THE Department of Energy (DOE) cited the renewal of the Malampaya service contract and enforcement of renewable energy (RE) policies as among the major accomplishments of the current administration, which has been pushing for energy security amid rising world oil prices.

In a report, the agency said the extension of Malampaya’s Service Contract (SC) 38 for 15 years, or until February 22, 2039, was a key indicator of progress in “the development of our natural gas industry in the Philippines.”

This move, it added, will allow the full production of the Malampaya gas field by ensuring the utilization of the remaining gas reserves estimated at 147 billion cubic feet.

In his 2022 S tate of the Nation Address, President Ferdinand R. Marcos Jr. noted the “uncertain policy in upstream gas, particularly in the area close to Malampaya.”

Marcos said this required “clarification of the processes and review of service contract policy.”

The government took the lead in providing investment incentives by approving the sale of shares of Shell Philippines Exploration B.V.’s (SPEX) 45-percent stake in SC 38 to MEXP Holding Pte. Ltd. (MEXP) on September 30, 2022. This “resulted in an all-Filipino consortium now operating the Malampaya Deepwater Gas to Power Project, the largest upstream petroleum operations in the country.”

In July 2022, Razon led-Prime Infrastructure Capital Inc., through its subsidiary Prime Energy Resources Development B.V., signed a share purchase agreement acquiring MEXP shares.

Prime Energy now holds a 45 percent operating stake in the Malampaya gas-topower project; UC38 LLC, 45 percent; and PNOC Exploration Corp., 10 percent.

The approval also led to the extension of SC 38, requiring the Malampaya consortium to explore the area around Malampaya for new wells.

“Aside from continuing the production operations, the SC38 consortium is required under the renewal agreement to conduct minimum work program consisting of geological and geophysical studies and the drilling of at least two deep-water wells during the sub-phase 1 from 2024 to 2029.

“ This firm work program is geared towards unlocking the potential both in the existing gas field and nearby prospect areas to provide incremental production,” the DOE said.

The DOE also said that with the renewal of the Malampaya SC 38, First Gen Corp. and Prime Energy has forged an alliance that will allow Prime Energy to lease and operate the First Gen’s LNG (liquefied natural gas) terminal.

“This will enable a gas aggregation facility that will provide fuel to power the country’s natural gas power plants [beginning with the power plants of First Gen] and enable them to continue running efficiently and reliably, provide blended gas prices more favorable to consumers, make the country a more serious player in the highly competitive LNG global market, and bridge ongoing efforts to locate, develop and harness more indigenous natural gas resources,” the agency said in its report.

The DOE is also pushing to achieve a 35-percent RE share in power generation mix by 2030 and 50 percent by 2040.

It said that it has streamlined the permitting process for energy projects through Energy Virtual One-Stop Shop (EVOSS) System. T he timeframes for a number of permitting process for various government agencies were adjusted from working days to calendar days to align with Republic Act 11234 or the EVOSS Act.