In light of the upcoming expiration of the franchise of the Malampaya gas field in 2024, the Senate Committee on Energy is set to hold a hearing on Thursday (April 26) with the aim of establishing a stronger legal framework to develop and regulate the country’s downstream natural gas sector.
“There is a need to clarify the government’s policy on our natural gas resources given the complexity of the industry, the current lack an institutionalized regulatory framework, and the need to replace the fuel sources of existing natural gas plants,” said Senator Win Gatchalian, chairman of the committee.
The Senate inquiry was set in motion by Senate Resolution No. 699, which Gatchalian filed last March 21.
Gatchalian said the Malampaya Gas-to-Power Project supplies fuel to three natural gas plants with a total installed capacity of 2,700 MW, comprising 17.85% of the installed capacity of the Luzon grid, and 12.49% of the installed capacity of the national power grid. Significantly, these plants served 53% of Meralco’s electricity demand for the March 2018 billing.
Considering the importance of natural gas in the country’s energy mix, as well as the Department of Energy’s drive to make the Philippines a liquefied natural gas (LNG) hub and its current pronouncement of a 50% baseload and 50% midmerit energy mix, Gatchalian stressed that further development of the industry would be necessary to attract more foreign investments.
The utilization of downstream natural gas started in 1998 with the declaration of commerciality of the Malampaya-Camago wells, resulting in the harvesting of the first gas reserves in 2001. In the same year, the DOE was anointed the lead government agency in the development of the Philippine natural gas industry through Executive Order No. 66.
Representatives from the DOE, the Energy Regulatory Commission (ERC), National Power Corporation (NPC), Philippine National Oil Company (PNOC), and the National Grid Corporation of the Philippines (NGCP), among others, are expected to attend the public hearing.