David Young
OGJ Online
LONDON, Sept. 20 -- Shell and the Philippines government have signed the final environmental agreements allowing the $2 billion Malampaya deepwater gas field to begin production ahead of schedule on Oct. 1.
Philippines President Gloria Macapagal-Arroyo is due to inaugurate the project Oct. 16 under intense military security. It will be the nation's first substantial gas field, and with three associated power projects, $4.5 billion will be invested.
Malampaya is 50 km northwest of Palawan Island and about 600 km southwest of Manila. It was discovered on block SC38 in 1992 and has reserves of more than 3 tcf of gas and 120 million bbl of condensate.
Production from a subsea manifold in 850 m of water will be transported to the production platform in 43 m of water.
The platform is a concrete gravity structure built at Subic Bay and mated to a steel topside built in Singapore. At 11,500 tonnes, the topside deck was the heaviest structure installed using the "float-over" technique (OGJ, Apr. 30, 2001, p. 78).
The Malampaya topsides will separate gas and condensate. The condensate will be temporarily stored in the concrete gravity structure caisson shells. It will be transferred to tankers via a catenary anchor leg mooring (CALM) buoy.
The dry gas will be moved via a 504-km, 24-in. pipeline to the onshore gas terminal at Batangas on Luzon Island. After treatment, it will supply three power stations nearing completion.
The remainder of the investment involves construction of three power plants. Korea Electric Power Co. is building a 1,200-Mw gas-fired power plant at Ilijan, and First Gas Power Corp. is constructing a 1,000-Mw plant at Santa Rita, both in Batangas. Manila Electric Co. will have a 500-Mw plant in the Calabarzon region. Proposals to convert four oil-fired power stations in the Philippines to gas are also under consideration.
Vincent Perez, the Philippines energy secretary, said the early commissioning of the project was timely in view of the prospect of any disruption to Middle East oil supplies following events in the US.
The project is estimated to generate $10 billion in revenues for the Philippines government over the next 20 years and cut the country's dependence on fuel imports, mainly high-sulfur coal and fuel oil, by 20-30%.
It also will cut $670 million/year from the nation's energy import bill of $2.5 billion/year, as well as bring in $420 million/year until 2021 in royalty payments from the 504-km, 24-in. pipeline connecting the platform to the onshore gas terminal.
The final agreement establishes the environmental and surveillance framework for the project and funding for the necessary work. The agreement also includes the involvement of government health and labor departments, local government units, the Palawan Council for Sustainable Development, and the Philippines Coast Guard.
David J. Greer, managing director of Shell Philippines Exploration (SPEX), said, "Under the auspices of this new agreement we will continue to commit no harm to the pristine environment in which we are working in and ensure the delivery of first gas on schedule."
SPEX is operator with 45%, Texaco Inc. has 45%, and Philippines National Oil Co. has 10%. The latter has indicated that it may sell a part of its stake.
Contact David Young at [email protected]
