Marubeni eyes small-scale gas plant in PH

Japanese firm Marubeni Corporation is eyeing investments in smaller-scale gas plant of 54 megawatts but eventually be increased to 200MW capacity.

This was indicated to media by Energy Secretary Carlos Jericho L. Petilla, yet qualifying that the Japanese company’s plea to government will be for it to be offered cost-competitive gas fuel.

But since new gas extraction from the Malampaya facility may not come until the end of 2015, the energy chief noted that his advice will be for them to initially venture into a plant that could also take on diesel as an alternative fuel.

With that investment configuration, Petilla noted that the plan of Marubeni will be to bring into the country an idled 54-MW facility that it may be able to run immediately when called for dispatch. The facility’s proposed siting will be proximate to the 1,200-MW Ilijan gas plant.

Although there is nothing firm yet with that business proposition, Petilla is counting on it as a measure that could shore up next year’s electricity supply primarily on the critical months of summer.

“The offer of Marubeni is they want to put up a gas plant, merchant plant. But they just have one condition… for them to be given a competitive gas price… they said, they can invest for up to 200MW plant,” Petilla expounded.

He noted that he apprised them to instead propound a gas price that they deemed “competitive” or reasonable, because the government might be able to link them for discussion with the Malampaya consortium.

Petilla said he cannot offer the banked gas – which is now under the charge of the Philippine National Oil Company – because that is up for auction as government policies require.

“I told them (Marubeni): What price are you looking at? Because I might be able to put them into contact with Shell for additional gas because it has extra gas. The size of the banked gas is the same as the banked gas that Shell has,” the energy chief stressed.

If combined, the volume of the government- owned banked gas and the additional production anticipated by Shell may still power additional 400MW capacity.

Yet aside from scale, the question raised on the extra gas output from the Malampaya field is how long it could last in running power facilities.

The Malampaya consortium led by Shell Philippines Exploration B.V. is currently winding up its multi-year and multi-phase $1.0-billion investment to reinforce pressure for gas production at the field.

The capital outlay was made so the Malampaya consortium can sustain the level of gas production based on its commitment to off-takers under their gas sale and purchase agreements or GSPAs.

Without the fresh investment, gas yield from Malampaya will start dwindling next year and may not be able to keep pace with its underwritten supply volumes until the lapse of its contracts by year 2024.