British Gas plc has signed a memorandum of understanding (MOU) with utility company First Philippine Holdings Corp. to conduct downstream natural gas operations in Philippines.
BG expects to invest $1.5-2 billion in the projects the next 6 years.
The operations are intended to use gas from offshore Malampaya and Camago gas fields to be developed by Pilipinas Shell Petroleum Corp. and Occidental Petroleum Corp., respectively. The gas will move to market via an offshore and onshore pipeline system. Oxy, Shell, and TransCanada PipeLines have expressed interest in participating in that system.
Meantime, Philippines officials report an Oxy group plans to drill a wildcat next month targeting a prospective oil bearing structure near Camago/Malampaya.
BG PLANS
BG's MOU covers construction of an onshore gas transmission pipeline, construction of a combined cycle power generating plant, conversion of two oil fired plants to natural gas fuel, and eventual construction of a gas distribution system to serve industrial and commercial customers.
BG said the 500 MMcfd flow expected from the fields will be twice the volume needed for the 1.5 million kw total power capacity envisaged under the deal. Reserves are pegged at 1.93.9 tcf, said to be enough to underpin production that could support generation of 3 million kw of power.
A gas fired power plant is planned for construction between Batangas and Manila. Also, two oil fired power stations, at Sucat and Tengen, will be considered for conversion to natural gas fuel. Most of the project's electrical power is expected to be purchased by Meralco, which supplies 60% of Philippines electricity.
BG said exact capacity figures for the plants have not been decided. Before the project can go ahead, BG will need to ensure that much power capacity will be required.
Gas is expected to be available at the shoreline in 1999 or 2000. BG said it is feasible for power plant construction to be complete by 1997-98, while construction of the onshore pipeline is set for 2000-2001.
The onshore pipeline, expected to cost $150-200 million, will run 110 km from Batangas to Manila. A 480 km pipeline is planned from Camago/Malampaya off Southwest Palawan to Batangas (see map).
A branch may be added connecting the line to Bataan, depending on feasibility of converting the Bataan nuclear power plant and the Limay power plant to natural gas fuel. The nuclear plant could be converted into a 1.8 million kw natural gas fired power plant. Bataan also is the site of state owned Petron Corp.'s 147,000 b/d refinery.
First Philippine operates a pipeline supplying fuel oil to the Sucat plant. BG said this may be converted to transport natural gas.
OXY WELL
Philippines Energy Undersecretary Rufino Bomasang said Oxy and three local partners plan to spud the 1 Bantac wildcat on their North Palawan block on or about Nov. 10.
The Oxy group is believed to be targeting oil on the structure there, said to be larger than that at Camago-Malampaya, the country's biggest hydrocarbon discovery.
Reportedly, the well will be drilled in 1,303 m of water, which would make it one of the deepest water depth wells drilled in Asia. Drilling would take 54 days and cost about $15 million.
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