Prime Energy surpasses Q2 output targets

Razon-led Prime Energy, the operator of the Malampaya gas-to-power project, saw its production output from April to June 2023 surpass its target for the second quarter of the year.

In a statement, Prime Energy said its energy production and supply to customers exceeded its target of 274 million standard cubic feet per day (MMSCFD) reaching 280 MMSCFD.

The company also said that facility’s total generated sales since its inception in 2002  until end of 2022 stood at $13 billion, against a total projected sales of $10 billion for the entire duration of the project.

“We are very proud of the excellent performance of the asset, enabled by the tireless commitment, ingenuity and proven capability of Prime Energy employees,” Donnabel Kuizon Cruz, the firm's general manager, said.

“We intend to maintain a reliable supply of indigenous gas to our customers while we continue the hard work of exploring for new sources to address the natural decline of the Malampaya gas field. We remain committed to being the partner of choice in providing energy sufficiency and security to the country,” Cruz said.

Th Malampaya facility supplies natural gas to power four generation plants in Batangas, with a combined capacity of 2,011 megawatts.

In its report, the DOE cited the extension of SC 38, which was originally set to expire in February 2024, until February 22, 2039 as among the agency’s accomplishments during the first year of the Marcos administration. 

The DOE said the license extension “allows full production of the Malampaya gas field by ensuring the utilization of the remaining gas reserves of about 147 billion cubic feet.”

“Further, this will kickstart the timely exploration and development of in-field and near-field prospects which may provide additional reserves of around 210 billion cubic feet,” the Energy Department said.

Under the Service Contract 38, the Malampaya Consortium will be remitting 60% of net proceeds from petroleum operations to the national government.

The consortium has remitted more than $13.14 billion from October 2001 to December 2022.

Aside from Prime Energy, other members of the SC 38 Consortium are Dennis Uy-led UC38 LLC and the state-run Philippine National Oil Company-Exploration Corp. (PNOC-EC).

At the sidelines of Post-State of the Nation Address (SONA) Economic Briefing in Pasay City, Energy Secretary Raphael Perpetuo Lotilla said that further drilling at the Malampaya field is seen to “boost the local natural gas industry.”

“There is much more to be done and the energy sector is ready to take on the challenges cited by the President in his second State of the Nation Address,” Lotilla said.

The Malampaya Consortium committed to investing about $600 million (roughly P33.7 billion) for further exploration and drilling activities beyond the existing production area within SC 38.

The consortium was mandated to explore and drill at least two new deep water wells during the first phase (2024-2029) of the work program under the 15-year renewed production contract.—LDF, GMA Integrated News