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Malampaya needs to tap new gas as demand seen to quadruple: Fitch unit

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Arthur Fuentes

ABS-CBN News

<p>MANILA - Malampaya needs to discover new gas fields as the demand for liquefied natural gas is expected to more than quadruple in the coming years, according to BMI,  a unit of Fitch Solutions.</p><p>BMI noted that the Philippines&#x27; energy security depends on Malampaya finding more gas to tap as production from its existing facility is expected to drop from 2.13 billion cubic meters (bcm) in 2024 to 0.94 bcm in 2033, which BMI said was &quot;a staggering 55.87 percent reduction.&quot;</p><p>Malampaya supplies natural gas to four power plants in Luzon, with a combined capacity of 3,200 megawatts making up around 20 percent of the power grid&#x27;s supply. The facility is operated by a unit of billionaire Enrique Razon&#x27;s Prime Infra.</p><p>&quot;The extension of the Service Contract 38 (SC 38) raises hopes for continued gas production, but it remains to be seen whether planned drilling efforts would result in additional gas discoveries,&quot; BMI said.</p><div><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/SpYkkTZW05w?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><br/></div><p>This comes as natural gas consumption is expected to rise from 2.85 bcm in 2022 to 12.63 bcm in 2033, marking a 343.5 percent increase, BMI said.</p><p>&quot;This strong demand growth will be fueled primarily by the expansion of gas-fired power generation capacity,&quot; BMI said.  </p><p>It noted that until 2022, the Philippines was self-sufficient in natural gas but since 2023 has been reliant on imports to meet demand. The research firm warned that reliance on imports exposes the country to price swings and supply chain disruptions.</p><p>&quot;Currently, none of the potential LNG consumers has signed long-term sale and purchase agreements with LNG producers and traders, leaving them entirely exposed to the spot LNG market,&quot; it added.</p><div><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/XqY3XuqXSr0?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><br/></div><p>It noted that geopolitical factors affect the price of LNG which adds uncertainty for investors and industry stakeholders.</p><p>BMI said resource exploration and the lifting of the moratorium on West Philippine Sea resource exploration, could potentially increase recoverable reserves significantly.</p><div><strong>DOUBTS ON NUCLEAR POWER GOING ONLINE SOON</strong></div><p>The research firm meanwhile said it doubts that the government will be able to include nuclear in the country&#x27;s energy mix any time soon, despite efforts to explore the feasibility of rehabilitating the mothballed Bataan Nuclear Power Plant.</p><p>BMI said that nuclear was unlikely to contribute to the country&#x27;s power supply this decade.</p><p>&quot;We highlight the technical complexities with regard to fuel replacement and loading of the stalled BNPP, stringent safety checks needed due to safety risks from natural disasters, and policy hurdles that the Philippines will have to overcome before having BNPP commercially operational,&quot; BMI said.</p><p>This was also the case with plans for offshore wind projects, which are still in the planning stage, BMI said.</p><p>&quot;Aside from nuclear power, the government has been pushing ahead with plans for offshore wind power, though we also expect the emergence of offshore wind to be unlikely over the coming 10 years given the current state of progress.&quot;</p><p>Instead, BMI said coal-fired power plants were likely to increase their share of the country&#x27;s power mix to above 60 percent up to 2025 before dropping below 60 percent in the succeeding years as gas-fired plants recover.  </p>

<p>Malampaya needs to discover new gas fields as the demand for liquefied natural gas is expected to more than quadruple in the coming years, according to BMI, a unit of Fitch Solutions.</p>

Malampaya needs to discover new gas fields as the demand for liquefied natural gas is expected to more than quadruple in the coming years, according to BMI, a unit of Fitch Solutions.