PSALM eyes $650M worth of unused Malampaya gas

Power Sector Assets and Liabilities Management Corp. (PSALM) is gearing up to purchase about $650 million worth of “banked” Malampaya fuel from Philippine National Oil Co. (PNOC), but wants to verify whether the natural gas can actually be drawn.

PSALM president Irene Besido-Garcia said at a press briefing the two state firms had recently signed a memorandum of agreement through which they “agreed in principle” on a possible transaction.

“However, PSALM is concerned whether or not we can draw the banked gas, that is the ultimate question,” Garcia said.

“We agreed that PNOC would coordinate with [the Malampaya consortium] to find out the feasibility of us actually getting the gas,” she added. “The moment they can guarantee that PSALM can draw on the banked gas, we can proceed to enter into a definitive agreement.”

Last valued at about $650 million, the banked gas refers to the accumulated unused gas earmarked for the 1,200-megawatt Ilijan power plant in Batangas, owned by PSALM and being operated and managed by the San Miguel group under contract.

Meanwhile, First Gen Corp. said a Malampaya gas supply interruption that started last weekend forced three of its gas-fed power plants—the 1,000-MW Santa Rita, 500-MW San Lorenzo and 97-MW Avion—to run on alternative fuel. This means condensate for Santa Rita and San Lorenzo, and diesel for Avion.

A fourth power plant, the 414-MW San Gabriel, can run only on natural gas and thus has been shut down.

“First Gen received advice from [the Malampaya consortium] that they expect to slowly start supplying gas from Malampaya today (Tuesday), and we are hopeful that our plants can all return to gas-fired operation soon,” the Lopez-led firm said. INQ