Prime Energy reports Malampaya phase 4 reaches five-year peak output

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Malampaya phase 4 peak output

Highlights

Malampaya gas field phase 4 reached output of 400 million standard cubic feet per day, the highest in five years, validating nearly $1 billion in investments.
Service Contract No. 38 was renewed for 15 years through 2039, enabling exploration that adds 222 billion cubic feet to recoverable reserves and extends Malampaya's operational life by about six years.
Malampaya output increased gas utilization by 17%, reducing power plant generation costs and lessening the sector's exposure to import costs and volatile international energy prices.

Phase 4 output and reserve expansion

As reported by BusinessWorld Online, Prime Energy Resources Development B.V. says phase 4 of the Malampaya gas field generates peak output of 400 million standard cubic feet per day, the highest level recorded in five years. Prime Energy President and Chief Executive Officer Donnabel Kuizon Cruz says the result validates the nearly $1 billion invested in phase 4 infrastructure.

Cruz says Prime Infra built the integrated gas-to-power system to optimize supply and maximize deliveries to customers when demand is highest. Since commercial operations began in 2001, the Malampaya Deep Water Gas-to-Power Project has supplied natural gas to power plants in Batangas that support approximately one-fifth of Luzon's electricity needs.

The consortium secured a 15-year renewal of Service Contract No. 38 through 2039, opening the way for the exploration and development of additional gas reserves. Last week, MP4 successfully produced natural gas from the Malampaya East-1 and Camago-3 wells, the first deepwater drilling campaign at Malampaya in more than a decade.

Power sector implications in Luzon

The development is expected to extend the productive life of the Malampaya field by about six years. The two wells are expected to add 222 billion cubic feet to recoverable natural gas reserves, with the potential to generate 31.46 billion kilowatt-hours of electricity.

Prime Energy says higher Malampaya gas utilization, by around 17%, lowers generation costs for gas-fired power plants. The company adds that greater use of indigenous gas reduces the power sector's exposure to import costs and volatile international energy prices.

Malampaya supplies gas to the 2,000-megawatt natural gas assets of Prime CoreGen, the downstream natural gas and power generation subsidiary of Prime Infra. Prime Energy says domestic gas, together with imported liquefied natural gas, provides supply flexibility to support reliable electricity generation while helping manage costs amid geopolitical pressures in global energy markets.

This adds to earlier discussion around oil tanker rates and how higher shipping costs can squeeze import-dependent fuel markets.

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