PH in ‘dire need’ of new natural gas supply, says report | Inquirer Business

PH in ‘dire need’ of new natural gas supply, says report

Hampered movement of workers and supplies due to the COVID-19 pandemic has compounded the Philippines’ dire need for new sources of natural gas as output from its only source, the Malampaya project, declines. In their latest commentary on the subject, Fitch Solutions Macro Research noted a lack of discoveries and suspended drilling operations “in the potentially resource-rich South China Sea” due to unresolved maritime disputes as well as slow progress of joint exploration negotiations with China.

These “mean that the mature field [Malampaya in offshore Palawan in the West Philippine Sea] continues to serve as the country’s only significant source of hydrocarbon output even after some 20 years,” Fitch Solutions said.


Malampaya provides fuel to a number of power plants in Batangas province that altogether represent more than 3,000 megawatts of generating capacity, accounting for one-fifth of national full-year electricity supply, or 30 percent of Luzon’s.

“The Philippines’ need to find alternative sources of gas remains dire, as output decline from the sole producing Malampaya deepwater gas-to-power project accelerates,” Fitch Solutions said.


Data from the Department of Energy shows that domestic production of natural gas eased down to about 150,495 million standard cubic feet (mmscf) in 2019 from a record high 150,804 mmscf in 2018.

But while Philippine annual output has been fluctuating through the past two decades, Fitch Solutions said Malampaya was expected to be nearly depleted by 2027.

The company reiterated that “[f]rom a price standpoint, the next few years is likely to prove an opportune time for the Philippines to commence LNG (liquefied natural gas) imports.”Fitch Solution also reiterated that “[t]he lack of emphasis on natural gas, LNG and renewables in the Philippines’ Energy Plan 2017-2040 continues to be a source of potential concern.”

“The Philippines has yet to enter into any LNG supply contracts for its terminals, and as such,

will prove an attractive market for the growing legion of LNG suppliers globally,” it said. INQ

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