Philippine government may halt the operation on Malampaya natural gas field project if it is determined not to extend the service contract of the consortium led by Shell Philippines Exploration B.V. (SPEx), Department of Energy(DOE) Secretary Carlos Jericho Petilla said.
Malampaya Deep Water Gas-to-Power Project (Malampaya) is a US$4.5 billion joint venture the Royal/Dutch Shell subsidiary Shell Philippines Exploration (SPEX), Chevron Texaco, and the Philippine National Oil Company (PNOC)—is the largest industrial investment in the Philippines. The project extracts natural gas from below the seabed off the coast of Palawan Island and transports it more than 500 kilometers by undersea pipeline to a natural gas refinery plant.
According to Petilla, if the consortium’s overture is not good, the government may prefer to continue the project after the SPEx’s contract expires in 2024 and he also added if SPex is going to comply proposal favorable to the government, contract extension for 15 to 25 years may be considered.
“I am after what we will get in return. I am asking Shell, what is your offer? If it is the same, the government can just run it,” Petilla told reporters.
Companies are looking forward to produce more oil and gas in the 83,000-hectare project in Northwest Palawan and Petilla said the consortium has not made proposal yet, and as result DOE has not made any decision to extend the Malampaya service contract for 15 years.
“They have not given anything at this point,” Petilla said.
Malampaya project operated by SPEx wants a 15-year extension of Service Contract to 2039 as the company is planning do more explorations and investments for the project.
