Access to $350M banked gas at Malampaya crucial: MAP

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    The continued operations of the Malampaya gas project beyond 2024 will ensure government will have access to the resource’s banked gas worth at least $350 million (about P17 billion).

    Ernesto Pantangco, chairman of the committee on energy of the Management Association of the Philippines, told a Senate hearing yesterday government should make sure Malampaya gas will continue to be operational beyond the expiry of the contract with the current consortium operating the project.

    The banked gas is the unused natural gas stored at the Malampaya gas reservoir located northwest of Palawan in which part of the sale proceeds will go to the Philippine government.

    Pantangco also said the government must once and for all resolve the still pending tax computation disputes of earnings in the gas-to-power project as well as the ownership of the Ilijan natural-gas fired power plant which is one of the biggest users of fuel from Malampaya.

    At the hearing, senators questioned the process in which Udenna Corp. acquired 100 percent stake in Chevron Malampaya LLC, service contractor of the project, for $565 million.

    Lawmakers said through “corporate layering,” Udenna took over Chevron Malampaya LLC whereas the Philippine government has previously signed the consortium agreement with the latter’s parent firm.

    They questioned whether Udenna would automatically be considered as a qualified service contractor of the fuel source when it took over ownership from Chevron which is technically qualified to operate the asset.

    “If there is vagueness, we may face some legal problems later and this could be brought to the Supreme Court,” said Senator Panfilo Lacson .

    At present, Shell Philippines Exploration B.V. and Udenna each has 45 percent interest in the Malampaya resource and PNOC-Exploration Corp. owns the remaining 10 percent.