DOE: Malampaya shutdown can no longer be moved

Categories: Business Updates

Date Posted: 31 Jul 2014

The consortium running the Malampaya natural gas platform has informed the Department of Energy (DOE) that it could no longer reschedule the maintenance shutdown of the facility.

“SPEX (Shell Philippines Exploration B.V.) is not yet ready,” said DOE Secretary Carlos Jericho Petilla in a text message on Wednesday, July 30, when asked if maintenance work can be done in January to February next year.

The Malampaya facility is scheduled to go offline from March 15 to April 14, 2015 to commence the installation of a platform aimed at maintaining the fuel supply to power plants providing half of Luzon’s power needs.

Power distributor Manila Electric Company (Meralco) had suggested to move the maintenance shutdown earlier or after the summer months when electricity demand is not at its peak. Meralco said this would help address the anticipated power shortage next year.

Reacting to this, Petilla said, “We have vetted this out and SPEX is saying that it’s the only window they have.”

A delay in the maintenance work could affect the Malampaya facility’s output, noted Petilla. “Our worry is gas production if Malamapaya maintenance is delayed.”

The Malampaya gas field off Palawan is estimated to contain 2.7 trillion cubic feet of natural gas and 85 million barrels of condensate.

The facility is expected to run out of gas by 2024. It currently fuels 3 power plants – the 1,000-megawatt (MW) Sta. Rita, 500-MW San Lorenzo, and 1,200-MW Ilijan plants.

Petilla said there would be a shortage in power supply next year. (READ: Power emergency: What it means)

He said the projected demand in Luzon by 2015 is 9,011 MW – higher than this year’s demand of 8,717 MW. This can be attributed to the massive economic expansion and development in the country, he explained.

Based on DOE projections, there will be a deficit of 200 MW. To address this, Petilla said an additional 400 MW-500 MW capacity is needed to act as a buffer supply during the peak months.

No declaration of emergency powers yet

Petilla earlier recommended to President Benigno Aquino III to declare emergency powers so that the government could produce the needed capacity by renting modular generator sets to avert blackouts.

As of July 30, Petilla said there was still no word from the President. “We will just make do with whatever powers we have,” he said.

The DOE will continue to push for the Interruptible Load Program (ILP), Petilla said.

Under the ILP, customers with large loads, like commercial establishments, will be asked to operate their own generator sets if the grid operator projects a need to augment generation capacity in the Luzon grid. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the season.

Targeted ILP participants are those with large embedded generation capacities such as malls, large business establishments, and factories. Among those that have signed an agreement on ILP with Meralco include Megaworld, Ayala Land, Robinsons Land, Shangri-La Malls, SM Prime Holdings, Metro Gaisano, and Waltermart.

“ILP and energy conservation are the next best things,” Petilla said when asked what are the other solutions that the DOE can think of to plug the power shortage.

Aquino made no indication in his 5th State of the Nation Address Monday, July 28, whether he would seek emergency powers from Congress to address the power shortage.

Instead, Aquino instructed Petilla to coordinate with the Joint Congressional Power Commission, Energy Regulatory Commission, industry players, and consumer groups to come up with solutions to the problem. (READ: Aquino keeps mum on emergency powers proposal in SONA) – Rappler.com

Source: http://www.rappler.com/business/industries/173-power-and-energy/64847-malampaya-shutdown-reschedule-power-shortage

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