Forum Energy starts production of natural gas from Cebu field

MANILA, Philippines - UK firm Forum Energy Plc. has started the production of natural gas from its Libertad gas field in Cebu, a top energy official said.

Energy Undersecretary Jay Layug said the Libertad gas field is situated in northern Cebu and lies within Service Contract 40. 

The field was discovered in the late 1950s but was not immediately developed. A testing program was carried out from 1993 to 1995 involving the drilling of around seven wells, with one of the wells showing positive results for gas.

Forum Energy carried out a feasibility study in 2004 to determine the most commercially viable option for the development of the field.

The results recommended a development plan using three gas-to-electricity generators, with a maximum capacity of three megawatts which will be developed by Desco, a leading provider of petroleum and geothermal products and services in the Philippines.

Forum Energy had earlier signed a gas sale and purchase agreement with Desco, for the development of the Libertad gas field for power generation. Forum Energy will act as gas supplier to Desco.

Desco, under the agreement, will install within the power generating units in Bogo, northern Cebu using GE Jenbacher gas engines.

Forum Energy, for its part, will sell the gas to Desco at an agreed rate of $1.50 per million British Thermal Units for the first 0.70 billion cubic feet of gas extracted and utilized, and $1.60 per million BTU for any gas produced beyond 0.70 BCF.

The company earlier said Desco would supply electricity from the gas plant to Cebu Electric Cooperative Inc.

Forum Energy, meanwhile, said interpretation of 3,000 line-kilometer of 2D seismic data started in May. The data will enable the company to generate prospects for possible drilling on the Toledo and Maya areas, also located within SC 40, by next year.

Forum Exploration Inc., a wholly-owned unit of Forum Energy, holds 66.66 percent of the Libertad project while Forum Pacific Inc. owns the remaining 33.33 percent.