MANILA, Philippines - The government received $1.1 billion as its share in royalties for 2012 from the Malampaya gas project off Palawan.
The Department of Energy (DOE), together with the consortium operating the $4.5-billion deep water gas-to-power Malampaya project, turned over the check to Finance Secretary Cesar Purisima yesterday.
Under the service contract agreement, 70 percent of the gross proceeds from the sale of natural gas would go to the contractor to recover the investment cost. The remaining 30 percent will be shared by the government and the consortium on a 60-40 basis, respectively.
The pioneering Malampaya project fuels three natural gas-fired power stations with a total generating capacity of 2,700 megawatts to service up to 45 percent of Luzon’s power requirements.
The funds would go directly to the Malampaya Fund that is being managed by the DOF. This fund was formed to fund energy development projects or for other purposes approved by the President.
“Malampaya continues to benefit the country by providing much needed government revenue, and clean energy to power the lives of millions of Filipinos,†said Sebastian Quiniones, managing director at Shell Philippines Exploration BV (SPEX).
The government’s share, however, is expected to decline once the consortium undertakes a $1-billion investment for phases 2 and 3, which include the drilling of two additional production wells and the installation of a second platform to house additional compressors for depletion compression.
The first phase of the project entailed an investment of $4.5 billion, considered as the single biggest investment in the country.
“We proceed with the project’s next phases of development with the same standards of excellence and commitment to safety that we have lived by all these years, as we know the generations of Filipinos who benefit from Malampaya deserve nothing less,†Quiniones said.
Malampaya is a joint undertaking of the government and a private consortium led by Shell Philippines Exploration (SPEX), which owns a 45-percent stake in Service Contract 38 or Malampaya. Chevron Malampaya LLC owns the other 45 percent while PNOC Exploration Corp. holds the remaining 10 percent.
As Malampaya operator, SPEX continues to shape the future of energy and gas by using advance technologies and innovation to help deliver cleaner energy and to find ways to use energy more efficiently.
“Malampaya is a prime example of what we can do if we work together towards a shared vision. It is proof of what the Philippines is capable of and a testament to the Filipino spirit. It has set the standard for future energy projects to aspire to,†said Energy Secretary Jericho Petilla.
Apart from meeting the bulk of Luzon’s power generation requirements, Malampaya has been providing other benefits to the country such as reduced oil imports, a stable supply of energy and a cleaner source of power.
Natural gas is the fuel for sustainable growth and development, helping to meet the world’s future energy needs as the cleanest-burning fossil fuel with a globally abundant and diverse supply.