Malampaya group to award contract in 2010

MANILA, Philippines - The Malampaya consortium is expected to award early next year the 300-megawatt (MW) excess capacity auctioned off a few months ago, a Department of Energy (DOE) official said.

DOE director Jesus Tamang said they expect the Malampaya group, composed of Shell Petroleum Exploration BV, Chevron and PNOC-Exploration Corp., to come up with the results of the bidding for the excess gas at the Malampaya field by next month.

Tamang said the bidders have reportedly requested for more time to conduct their respective due diligence which affected the timeline for the announcement of the wnning bidder.

According to the DOE official, there were four groups that expresssed interest to participate in the bidding.

“From my understanding, there were four bidders that were supposed to participate in the auction but I don’t know how many exactly had submitted their final proposals,” he said.

Tamang said based on the information furnished to the DOE, the bidding terms for the excess capacity would come in a “package” form. This means that the prospective bidders have to indicate in their bids what they intend to do with the 300 MW or 150 billion cubic feet of natural gas output.

Natural gas, at present, is being used in the country’s power sector, transport and industries.

Currently, the Malampaya project provides gas supply for three natural gas power facilities in Batangas — Ilijan, Sta. Rita, San Lorenzo, with combined capacity of 2,700 MW

There are some companies that are eyeing the excess gas, like Korea Electric Power Co., Chevron Philippines, and First Gen Corp., have plans of expanding their natural gas facilities and/or build new power facilities.

The growth of the compressed natural gas (CNG) industry remains largely dependent on natural gas from the Malampaya gas field in Northwest Palawan.

Among the interested bidders were Callandra LCNG Fuels Corp. and Flying V.

Callandra is the Philippines’ first and only government-accredited entity to develop a CNG fueling infrastructure for the public transport sector.

The company earlier said it is prepared to invest from $77 million to $110 million for six fueling stations and a processing plant for CNG in Batangas.