Philippine President Ferdinand Marcos Jr. has signed a renewal agreement to extend the production contract for the Malampaya natural gas block.
The agreement, which extends the contract by 15 years, is aimed at ensuring that the remaining gas reserves are explored and used.
According to Reuters, the Malampaya gas field has been the source of supply for four power plants owned by First Gen, which collectively generate approximately 2,000 MW of electricity for Luzon Island.
Until a supply agreement expired last year, it had also been used to fuel the 1,200mw Ilijan power plant owned by San Miguel.
The existing 25-year contract for the filed, which is located off-coast Palawan province in South China Sea, is set to expire in February 2024.
“As we renew, we optimistically look forward to the continued production and utilization of the remaining reserves of the Malampaya gas field, as well as further exploration and development of its untapped potential,” Marcos was quoted by the news agency as saying.
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Filipino tycoon, Enrique Razon-backed Prime Infrastructure Capital, which owns a 45% operating stake in the Malampaya project, plans to start commercial operations on new wells by 2026.
The consortium responsible for the contract renewal is obligated to drill a minimum of two wells from 2024 to 2029.
It comprises the Philippine National Oil Company with a 10% stake and Udenna Group’s UC38 LLC with a 45% stake.
“The discovery of additional reserves in the Malampaya gas field will boost the country’s quest for energy security. It is also expected to encourage opportunities for further exploration in the country, which to date remains underexplored, and to add to the Philippines’ energy portfolio,” the government’s statement read.