MAP seeks ‘clarity’ on natural gas policy

The Management Association of the Philippines (MAP) yesterday called for “clarity” in government policy as well as “good planning” to address the looming depletion of Malampaya gas, which state and industry officials say could happen in the early 2020s.

The MAP made the statement amid moves in the Senate to prepare laws needed for the development and regulation of the Philippine natural gas industry, particularly with the approaching expiration of the Malampaya franchise in 2024.

In a two-page position paper issued yesterday, the MAP said the government must strive for a clear path toward “a geopolitical solution” to allow much-needed exploration for new gas resources, considering that development of a new production field could take a decade.

The group was alluding to an impasse in exploration activities amid continuing Chinese activities in areas claimed by the Philippines.

The MAP said that while fuel from the Malampaya production field was running low, there are areas in the West Philippine Sea that show potential for exploration and production of natural gas.

“A geopolitical solution to this is being developed by the Duterte administration as per latest advice from the government,” the MAP said.

The group added that, at the same time, there were technical solutions to exploit the new fields and a “tie-back” to the existing Malampaya project was “a good option.”

“This requires the right timing which considers Malampaya decline and the speed in which new facilities can be set up, noting that development of a new gas field can take a decade,” the MAP said.

“It however must start with exploration activities which cannot take place until an agreement [with the Chinese] is reached,” the group added.

Further, MAP recommended the extension of the contract with the current operator of the Malampaya project—a consortium led by Shell Philippines Exploration BV—to allow continuity and allow extraction of additional nearby gas deposits.

MAP’s other recommendations include the Commission on Audit dropping its tax claims against the Malampaya consortium.

MAP also recommends the settling of the issue on who actually owns the 1,200-megawatt Ilijan power plant in Batangas, which currently runs on Malampaya gas.

The group also called for action toward using the stockpiled Malampaya gas, which the state-run Philippine National Oil Co. has valued at $650 million.