Philippines gas field development on track

A $2 billion Philippines gas field development has a green light after units of Royal Dutch/Shell Group and Occidental Petroleum Corp. clinched a supply deal last week. The deal also supports another $2 billion in pipeline and power projects. Shell Philippines Exploration BV and Occidental Philippines Inc. secured an agreement to supply Manila-based First Gas Holdings joint venture with gas from Malampaya and Camago fields off the Philippines. Signing of the memorandum of understanding

June 30, 1997

2 min read

A $2 billion Philippines gas field development has a green light after units of Royal Dutch/Shell Group and Occidental Petroleum Corp. clinched a supply deal last week.

The deal also supports another $2 billion in pipeline and power projects.

Shell Philippines Exploration BV and Occidental Philippines Inc. secured an agreement to supply Manila-based First Gas Holdings joint venture with gas from Malampaya and Camago fields off the Philippines.

Signing of the memorandum of understanding outlining the deal took place in London June 18.

The fields will be developed jointly with subsea wells in deep water tied back to a gas processing platform in shallower water, from which a 450-km pipeline will take gas to a shore terminal at Tabangao on Luzon Island.

First gas is slated for Jan. 1, 2002. The contract calls for delivery of 1.46 tcf of gas during a 20-year period. First Gas Holdings plans to use the gas to fuel two electricity generating plants.

BG plc, 40% interest holder in the JV, said First Gas Holdings plans to build a 1,000-MW power plant at Santa Rita and a 500-MW unit near Batangas.

Shell and Oxy have also signed a memorandum of understanding with National Power Corp. (NPC), Manila, for supply of gas to a 1,200-MW combined cycle power plant to be built at Ilijan.

The amount of gas covered in this second contract has not been disclosed, but the deal is also expected to involve supply for 20 years.

Development of the gas fields is expected to cost $2 billion, while construction of the pipeline and power plants is expected to amount to $2 billion.

The fields have combined reserves estimated at 3.9 tcf of gas. Total output from the fields is expected to be as much as 500 MMcfd (OGJ, Oct. 10, 1994, p. 38).