The Department of Energy (DOE) said the government’s approval to the sale of Shell Philippines Exploration B.V.’s (SPEx) 45-percent stake in the Malampaya gas-to-power project was premised on Prime Infrastructure Capital Inc.’s commitment to expand gas production and possibly develop other nearby resources.
“The approval by the DOE of the sale of Shell ‘s interest in Service Contract 38 of Malampaya was premised also on the commitment of the new entrant to maximize the development of the existing resources in the Malampaya Camago reservoir with a view to developing the nearby fields as well,” Energy Secretary Raphael Lotilla said in a briefing yesterday.
Lotilla added the DOE only approved the sale of SPEx shares to Razon-led Prime Infra after a thorough review.
“The new entrant is committed to maximize the utilization of the remaining natural gas in the Malampaya-Camago reservoir with a view to developing nearby gas fields… I am confident that this trend will continue as we reaffirm to prospective investors the openness of our economy to foreign and local investors and we assure them of the continued stability of our legal framework especially in the upstream oil and gas sector,” Lotilla said.
The DOE cleared the sale last month after Prime Infra was found to be technically, financially and legally qualified to take over as the new operator of Malampaya.
Under the deal, SPEx will remain as a subsidiary of Prime Infra, which will assume full ownership and control of SPEx upon completion by November 1, 2022, of the process for safe and seamless turnover of operations from Shell.
Prior to the DOE approval, the sale of SPEx shares to Prime Infra got the consent of the Malampaya consortium and PNOC Exploration Corp (PNOC-EC).
After the transaction, Prime Infra owns 45 percent share in the natural gas project with the other 45 percent held by Udenna through Chevron Malampaya LLC and the remaining 10 percent held by PNOC-EC.
The Malampaya project is considered among the country’s most important power assets as it produces natural gas to power plants in Batangas that power up to 20 percent of Luzon’s total electricity requirements. – Jed Macapagal
