Chevron readies Malampaya exit

MANILA, Philippines — Chevron expects to complete its exit from the Malampaya deep water-gas-to-power project by the middle of the year.

This, as its local unit Chevron Philippines Ltd. signed a sale and purchase agreement to sell its 45 percent stake in the $4.5 billion Malampaya project to Udenna Corp.

The deal was announced by Udenna, the holding company of Dennis Uy, in November 2019.

Udenna subsidiary UC Malampaya Philippines Pte. Ltd. bought 100 percent of Chevron Malampaya LLC, which holds Chevron Philippines’ non-operated interest in Malampaya.

The Department of Energy (DOE) is reviewing the entry of Udenna in the Malampaya project.

The Malampaya project is under Service Contract (SC) 38, which falls under the jurisdiction of the agency, DOE Undersecretary Donato Marcos said earlier.

The DOE will conduct financial, legal and technical review of Udenna and whether it is compliant with the process.

Meanwhile, the DOE will also review the right to match the offer of Udenna exercised by Philippine National Oil Co.-Exploration Corp. (PNOC-EC).

The state-run firm will match Udenna’s offer equivalent to its existing 10 percent interest in Malampaya.

Energy Secretary Alfonso Cusi, who also sits as ex-officio chairman of PNOC-EC,  said increasing its stake in Malampaya would be advantageous to the government.

The Malampaya project is PNOC-EC’s largest project to-date. The agency’s other partners include Shell Philippines Exploration B.V. (SPEX), a local unit of energy giant Royal Dutch Shell with 45 percent and Chevron Malampaya LLC with another 45 percent.

As the largest natural gas industrial project in the Philippines, it recovered all costs in four years.

The Malampaya gas project supplies fuel to around 40 percent of gas-fired plants in Luzon with over 3,000 MW in capacity.

While the contract will end in 2024, supply from the Malampaya gas field is projected to be depleted by early 2022 or 2027 at the latest.