Gas field surpasses its export capacity to ensure energy security in Philippines due to grid alert

Prime Energy Resources Development, a subsidiary of Prime Infrastructure Capital Inc., has tucked a new export capacity milestone under its belt at a natural gas field off the coast of the Philippines, Asia.

After the Luzon grid was placed on red and yellow alerts on April 16 by the National Grid Corporation of the Philippines (NGCP), Prime Energy, as the operator of service contract (SC) No. 38 which governs the Malampaya project, explained that the offshore field was able to deliver more than its export capacity, as gas supply to customers peaked at 290 million standard cubic feet per day (MMSCFD), compared to the previous maximum capacity of 262 MMSCFD.

Donnabel Kuizon Cruz, Managing Director and General Manager of Prime Energy, commented: “When needed by the grid, Malampaya was able to reliably deliver even more than export capacity. Malampaya was able to deliver on demand because all producing wells were available and there was sufficient reserve in the gas export pipeline.

“The system reliability and availability of Malampaya in March was 100%. Malampaya has long maintained top-quartile reliability performance. We are committed to continue providing dependable domestic gas supply especially in grid alert scenarios that could affect millions of Filipinos in Luzon.”

According to Prime Energy, the power supply is insufficient to meet consumer demand and the transmission grid’s regulating requirement under a red alert status while a yellow alert status is issued when the operating margin is not sufficient to meet the grid’s contingency requirement. Currently, Malampaya supplies indigenous fuel to four gas-fired power plants in Batangas: Santa Rita, San Lorenzo, San Gabriel, and Avion. This field supplies 20% of Luzon’s electricity requirements.

Guillaume Lucci, Prime Infra President and CEO, said in a recent interview: “Malampaya is playing absolutely a critical role in ensuring avoiding volatility, stability of gas prices, energy security. We have just contracted the drilling vessel that will come in next year and drill three new wells: two development wells and one exploratory well.

“Bagong Pagasa will be the exploratory well. We’ll be spending over $750 to $800 million over the next couple of years to try to extend the life of Malampaya as far as we can. It’s a very critical asset, of course, for the nation.”

Moreover, Prime Energy’s two deepwater development wells in the Camago and Malampaya East fields, as well as a third exploration well, Bagong Pagasa, approximately 15 kilometers north of Malampaya, are expected to be drilled by Noble Corporation’s Noble Viking drillship, which was hired to spud three wells, with an additional one-well option, at the Malampaya-Camago project.

The drilling campaign is slated to start in 2Q 2025. The Malampaya deepwater gas-to-power project is said to be one of the largest and most significant industrial endeavors in Philippine history. In March 2023, OneSubsea, a joint venture backed by SLB, Aker Solutions, and Subsea7, won a contract to deliver subsea equipment for Malampaya Phase 4.