Shell, Oxy sign Malampaya pacts

Shell Philippines Exploration BV and Occidental Philippines Inc. have signed commercial agreements for a giant gas field development and linked power generation scheme in the Philippines. Shell and Oxy have been negotiating for several years for power projects to enable development of Malampaya and Camago gas finds, which have combined estimated reserves of about 4 tcf of gas (OGJ, Oct. 10, 1994, p. 38).

Jan. 19, 1998

2 min read

Shell Philippines Exploration BV and Occidental Philippines Inc. have signed commercial agreements for a giant gas field development and linked power generation scheme in the Philippines.

Shell and Oxy have been negotiating for several years for power projects to enable development of Malampaya and Camago gas finds, which have combined estimated reserves of about 4 tcf of gas (OGJ, Oct. 10, 1994, p. 38).

Shell and Oxy say they have potential to prove more gas reserves in the vicinity for further power projects, but that development of Malampaya and Camago could meet the feed requirements for up to 3,000 MW of generating capacity.

Project details

Malampaya and nearby Camago were found in 1,000 m of water off the Philippines in 1989 and will be developed with subsea production centers tied back to a processing platform in shallower water.

From the platform, a 510-km pipeline will take gas to shore to feed a number of power stations near Batangas, south of Manila. The field development and power plants project is expected to cost $4.5 billion: $2 billion for the gas field development and $2.5 billion for power plants.

The commercial agreements were signed by Shell and Oxy with First Gas Power Corp., National Power Corp., Manila Electric Co., and independent power producer Kepco Philippines.

BG plc, a partner in the First Gas Power joint venture, said the Shell/ Oxy development will provide first gas in 2002. Total gas output is expected to reach 500 MMcfd, along with 25,000 b/d of condensate.

Initially, power plants with combined capacity of 2,700 MW will be built: a 1,200 MW unit at Ilijan by Kepco; a 1,000 MW plant at Santa Rita by First Gas Power; and a 500 MW unit in the Calabarzon region, also by First Gas Power.

First Gas Power's Santa Rita plant is due in operation in 1999, to supply customers in the Manila area. The venture has signed contracts with Enron Corp. for supply of condensate to fuel the plant until Malampaya/Camago comes on stream.