The Malampaya consortium and its operator Shell Philippines Exploration B.V. (SPEX) continues to drag its feet on the delivery of banked natural gas from Malampaya to bilyonaryo Ramon S. Ang-led San Miguel Corp.
The consortium claimed that delivery of banked gas from Malampaya could affect the pressure of the gas reservoir at the gas field in northwest Palawan but state-run Philippine National Oil Co. (PNOC) isn’t buying SPEX’s explanation.
SMC acquired unused gas from the Malampaya project in northwest Palawan from the government for $1.2 billion.
“The SC 38 consortium has not heeded the directives of the DOE for them to deliver the quantity. The SC 38 is giving us the excuse that because of the diminishing quantity or pressure of the banked gas reservoir, they are unable to deliver on that contract,” PNOC president Jesus Posadas said in a recent Senate hearing.
Other members of the SC38 consortium are UC Malampaya owned by Dennis Uy and PNOC Exploration Corp.
Posadas said the government should monetize the banked gas, and the consortium is being “unreasonable.”
SMC, through subsidiary South Premiere Power Corp., bought the banked gas to fuel its 1,200 megawatts Ilijan natural gas power plant in Batangas. The sale assures PNOC that the assets will not be stranded and will be fully monetized. It also ensures the uninterrupted operations of the Ilijan power plant.
PNOC earlier said SPEX had failed to comply with the directives of the Department of Energy requiring it to immediately resume the supply and maintain the allocation of natural gas to the Ilijan plant.