A "block auction" or "joint tender" of the banked gas held by the Philippine National Oil Company (PNOC) and the anticipated additional 200-megawatt gas supply from the Malampaya field by 2016 was proposed by the European Chamber of Commerce of the Philippines (ECCP) to Energy Secretary Carlos Jericho L. Petilla.

The installation of new platform and drilling of two more wells will enable the Malampaya field to produce additional gas that could fuel a mid-merit power facility of 200MW capacity, it was noted.

The business chamber thus recommended that an immediate auction of the additional Malampaya gas supply plus the ‘banked gas’ be undertaken so they can become part of the short- to medium-term power supply solution for the country.

“By 2016, Malampaya will have additional gas available to power a 200MW mid-merit plant. PNOC owns banked gas enough to power another 200MW mid-merit plant,” the ECCP correspondence to the energy chief has stipulated.

The ECCP emphasized that “the ideal situation is for the banked gas and additional gas to be tendered as one block to enable construction of a more efficient 400MW mid-merit plant on stream by 2016, instead of two small 200MW plants.”

It further noted that “the DOE (Department of Energy) should facilitate the resolution of issues delaying the joint tender of these two tranches of gas.”

Power projects, like the 414-MW San Gabriel venture of First Gen Corporation, have been awaiting the government’s move as to the planned competitive bidding for the banked gas and the added gas yield from Malampaya for their fuel needs.

Mid-merit plants are desirable in electricity systems because their operations can be cycled, hence, they can be depended upon to fill in supply gaps between the peak and base loads.

The banked gas was from the ‘unused capacity’ for the 1,200-megawatt Ilijan natural gas fired power plant at the infancy of its operations. It was purchased by PNOC from state-run National Power Corporation, which was the counter-party of Shell Philippines Exploration B.V. (SPEX) in the gas sale purchase agreement (GSPA) for the Ilijan plant’s fuel requirements.

The unused gas was initially planned for another power plant, but since the project was shelved, it has not been utilized since then.

The energy department has been making pronouncements on the ‘banked gas bidding’, but there is no clear direction as to how it wants to be carried out until now.

The most recent plan was to anchor it on the planned completion of the proposed 105-kilometer Batangas-Manila high pressure gas pipeline. But project developers of gas-fired plants are now embracing landscape changes – generally veering away from ‘pipeline system’ and shifting onto installations of floating storage and regasification units (FSRU) closer to their generating facilities.

Source: Manila Bulletin, 19 August 2014