Shell: Malampaya expansion on track

The expansion of the Malampaya deepwater-to-gas power project in offshore Palawan is progressing and on track, according to operator Royal Dutch Shell plc, one of the venture partners.

Shell projects and technology director Matthias Bichsel said in a briefing during the Shell Innovation Summit 2013 that two wells were recently successfully drilled, which added new resources to the project.

“We have just started with the facilities for compression,” Bichsel said, saying this keeps gas flowing on the reservoir and prolongs the life of Malampaya. “I think that is an integral part in the upstream game,” Bichsel said.

The next step, he said, was to serve what the reservoir could deliver. “If the reservoir can deliver more, then decisions will be made. But you have to do that in a sort of sequential approach,” he said.

However, EVP Maarten Wetselaar said in another briefing, “Malampaya has clearly reached a plateau and is unlikely to grow further.” Even so, he said, Shell continued to invest in the new phase of the field and to make sure the full resource would be developed for the benefit of the country.

In December 2012, developer and operator Shell Philippines Exploration BV kicked off the third phase of the $1-billion expansion with a “strike steel” at the Keppel Subic Shipyard in Zambales. The “strike steel” event refers to the ceremonial cutting of the steel plate that will form the mold for the platform base.

The $1 billion represents the additional investment in the project which was earmarked for Phases 2 and 3. It was on top of the $4.5 billion for the development and opening of the Malampaya power project. About $250 million was allocated for the drilling and development of two additional wells. Phase 3 involves $750 million in investment in the installation of the yard where additional equipment and facilities would be housed by December 2015.