Lawmaker seeks clarification on government stance on natural gas

MANILA, Philippines — The Philippines needs to clarify its position on natural gas resources given the impending expiration of the franchise of the Malampaya gas field in 2024, a lawmaker said.

“There is a need to clarify the government’s policy on our natural gas resources given the complexity of the industry, the current lack of  an institutionalized regulatory framework, and the need to replace the fuel sources of existing natural gas plants,” said Sen. Sherwin Gatchalian, who chairs the Senate Committee on Energy.

The Senate committee has set a hearing to establish a stronger legal framework to develop and regulate the country’s downstream natural gas sector.

Gatchalian said the Malampaya gas-to-power project supplies fuel to three natural gas plants with a total installed capacity of 2,700 megawatts (MW), comprising 17.85 percent of the installed capacity of the Luzon grid and 12.49 percent of the installed capacity of the national power grid.

These plants served 53 percent of Meralco’s electricity demand for March.

Gatchalian said further development of the industry would be necessary to attract more foreign investments, considering the importance of natural gas in the country’s energy mix and the Department of Energy’s drive to make the Philippines a liquefied natural gas (LNG) hub.

The utilization of downstream natural gas started in 1998 with the declaration of commerciality of the Malampaya-Camago wells, which resulted in the harvesting of the first gas reserves in 2001.

In the same year, the DOE was anointed the lead government agency in the development of the Philippine natural gas industry through Executive Order 66.

The DOE has issued the Philippine Downstream Natural Gas Regulation (PDNGR), which details the rules and regulations governing the downstream natural gas industry to gain energy security and sustainability.

The rules will allow the swift development of the country’s $2 billion LNG terminal.