CNG developer to bid for additional Malampaya output

Callandra LCNG Fuels Corp., a consortium of local and foreign investors developing the first fully commercial compressed natural gas (CNG) fueling infrastructure in the Philippines, has expressed interest to bid for the additional gas output from the Malampaya deep water gas-to-power project, a ranking company official said.

“We have submitted our letter of interest (LOI), to participate in the Service Contract 38 bid process for the available gas from Malampaya," Randall Antonio, Callandra chief executive officer, told reporters.

The SC 38 (Malampaya) consortium has informed interested parties to submit their respective LOIs for the sale of up to 149 petrojoles (approximately 150 billion cubic feet or 300 megawatts (MW) of natural gas. The consortium is composed of Shell Philippines Exploration B.V which owns 45 percent of the project, Chevron (45 percent) and PNOC-Exploration Corp., 10 percent.

Based on the bidding terms, interested parties should state where they are going to utilize the gas and provide a brief description of their project.

Antonio said they are now negotiating with development partners from the US and Europe for the possible LNG-related projects to justify their bid for the additional natural gas from Malampaya.

He said they are mobilizing engineers from the United States which they expect to finalize early next year.

For the past months, he said Callandra is preparing for other transactions to boost their natural gas development projects in the Philippines.

“As for brief updates for the last two months, we now have on board one of the world’s leading engine conversion company as a partner, and we now also have on board two former senior executives of high profile gas companies from Europe and the United States who are in the business of building and operating LCNG plants,” Antonio said.

Antonio said the company is pursuing its projects in the Philippines because they believe that natural gas will play a big role fueling up the economy in the future.

“I also just wanted to mention that the view here abroad — especially by the most successful oil man, Mr. T. Boone Pickens — is that the recent reduction in crude oil prices is temporary, so we must not fool ourselves that the lower prices of diesel and/or petrol is here to stay,” he noted.

“So we, just like the rest of the world, we remain strong believers that CNG is the inevitable next step to fuel our vehicles,” he added.

The Malampaya project has a gas reserve of 3,000 MW. At present, only 2,700 MW is being used to power up three natural gas power plants (the 1,200-MW Ilijan, 500-MW San Lorenzo and 1,000-MW Sta.Rita). The remaining 300 MW was signed up for National Power Corp. (Napocor) for its San Pascual project which did not push through.

It was learned that on top of the 300 MW remaining reserves, there is still about 200 MW that could still be tapped from the Malampaya project.