PXP Energy plans Malampaya gas hub project

The Pangilinan-led PXP Energy Corporation has submitted an unsolicited proposal to the Department

of Energy (DOE) seeking to utilize the Malampaya facilities for its targeted gas hub project upon the expiration of the gas field’s contract in 2024.

In a press statement disclosed via the Philippine Stock Exchange (PSE), PXP Energy indicated that it is targeting to establish an integrated “gas hub” venture at the current site of the Malampaya gas production facility.

The plan is to anchor this targeted investment on PXP Energy’s Service Contract 72, which is the propounded oil and gas exploration and development at the Recto Bank along Northwest Palawan basin.

“Under the unsolicited proposal, the Malampaya infrastructure and distribution network (the Malampaya facilities), which is strategically positioned in the West Philippine

Sea, is envisioned to support the continued development of the Malampaya resources,” PXP Energy has indicated.

The contract for the Malampaya gas field project is set to lapse in the next 4-5 years, but operator Shell Philippines Exploration B.V. (SPEX) is also batting for license extension on the gas field’s operations. That particular application has yet to be decided by the energy department.

On the other hand, PXP Energy’s drilling at the Recto Bank – which is considered part of the ‘conflict area’ in the West Philippine Sea, is still saddled with moratorium that was set forth by the Department of Foreign Affairs (DFA) since 2013.

PXP Energy itself has batted for the lifting of the drilling moratorium – in a correspondence that it first submitted with the DOE in December last year; but that was also eventually dribbled back to the foreign affairs department for its action.

The propounded gas hub project of PXP Energy at the Malampaya field, as emphasized, “intends to secure energy security to the country from indigenous natural gas resources for the next 25 years and beyond.”

The Recto Bank prospect of the Pangilinan-led firm is being envisaged to replicate the production scale of the Malampaya or one that can replace it once gas extraction from the field declines or be depleted.

The biggest hurdle for PXP Energy though is the diplomatic tussle that hounds its drilling target – and such may not likely be sorted out until the time that the Philippine government could strike out an acceptable “joint oil and gas exploration framework” with the Chinese government.

When that is done, the initial target of the company is to undertake extended seismic survey at its awarded petroleum block; then pursue the programmed well drilling activities.