DOE says it can’’t adjust Malampaya shutdown

The Department of Energy (DOE) said it would not be able to adjust the scheduled maintenance shutdown of the Malampaya platform off Palawan in the summer of 2015 as it hoped to avoid aggravating the already precarious power supply situation in Luzon.

“It’’s impossible to move it for various reasons. If it’s earlier, the operator said they would not make it. If later, the gas will start to go down as early as May and June. The schedule is as it is and we have to live with it,” Energy Secretary Carlos Jericho L. Petilla told reporters.

The 30-day maintenance shutdown set from March 15 at 12:01 a.m. to April 13, 2015 at 11:59 p.m., will enable the installation of a new platform under Phase 3 of the development program for Malampaya.

This is part of the $1-billion investment of the Malampaya consortium to maintain gas production from Service Contract 38 ($250 million for Phase 2, $750 million for Phase 3).

Manila Electric Co., the country’s biggest power distributor, earlier asked that the maintenance shutdown be moved ahead of the summer months to avoid straining the power supply in Luzon.

The Luzon grid is dependent on Malampaya as it fuels three power plants—Sta. Rita (1,000 megawatts), San Lorenzo (500 megawatts) and Ilijan (1,200 megawatts)—which would otherwise have to resort to more expensive fuel.

The DOE, instead, will adjust the maintenance shutdown schedules of power generation plants so that they will not coincide with the Malampaya shutdown.

The department is also trying to find sources of additional capacity or ways to reduce demand to narrow down the power gap of about 600 megawatts.

One of the possible solutions is the Interruptible Load Program where companies with their own generator sets may get paid for easing demand from the grid.

Malampaya Phases 2 and 3 are meant to keep up the volume of gas production and serve the requirements of client-power generators, according to Sebastian Quiniones, managing director of Shell Philippines Exploration B.V. (SPEX), the developer-operator of Malampaya.

The DOE data shows that the country’s largest natural gas producer will start losing output from 2015, and will run out by 2024 “if no further activities are undertaken until 2024.”

According to data from the Delegation of the European Union to the Philippines, the Malampaya project has earned the Philippine government some P24 billion to date since 2001.

Last year, amid the scheduled shutdown of Malampaya, the Sta. Riza, San Lorenzo, and Ilijan plants used more expensive liquid condensate and diesel.

Exacerbated by the unplanned outage of other power plants in the Luzon grid, these contributed to the record P4.15/kWh increase in electricity rates in December 2013.

Malampaya is a joint undertaking of the Philippine government and the private sector. The project is spearheaded by the Energy department, and developed and operated by SPEX on behalf of joint venture partners Chevron Malampaya LLC and PNOC Exploration Corp.