Shell stalls delivery of PNOC banked gas to SMC

San Miguel Corp.’s South Premiere Power Corp. has acquired the remaining uncontracted Malampaya banked gas through a sale and purchase agreement (GSPA) with the Philippine National Oil Co. (PNOC).

However, delivery of the gas to SMC has been hampered due to the failure of the SC38 consortium and its operator, Shell Philippines Exploration B.V. (SPEX), to resume supply to the 1,200 megawatt Ilijan gas-fired power plant of the diversified conglomerate.

The banked gas will supply fuel to the Ilijan power plant until full delivery of the total contract quantity on or before February 23, 2024.

PNOC said SPEX has yet to heed the series of directives by the Department of Energy (DOE), requiring them to immediately resume the supply and maintain the allocation of the natural gas minimum daily contract quantity of banked gas to the Ilijan facility under the GSPA.

The sale assures that PNOC’s remaining pre-paid banked gas, one of its most significant assets, will not be stranded and will be fully monetized.

It also ensures uninterrupted operations of the Illan facility, one of the largest natural gas power plants in the country. It secures sufficient and affordable power supply in the Luzon grid.