[Philippines] Malampaya

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escveritas
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[Philippines] Malampaya

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Key facts

Location: Offshore, northwest of Palawan island; West Philippine Sea
Depth: Wells are in 820 metres (2,690 feet) of water and the reservoir is 2,990 metres below sea level
Interests: Shell Philippines Exploration B.V. 45% (Shell-operated), Chevron 45%, Philippine National Oil Corporation-Exploration Corporation (government) 10%
Key contractors: Malampaya is a joint undertaking of the Philippine national government and the private sector. The project is spearheaded by the Philippine Department of Energy (DOE) and developed and operated by Shell Philippines Exploration B.V. (SPEX) on behalf of joint venture partners Chevron Malampaya LLC and the Philippine National Oil Corporation-Exploration Corporation
Fields: Malampaya-Camago gas reservoir
Production (100%): ~ 429 mmscf/d natural gas production; ~ 15 kb per day condensate

Current developments

Since 2001, the Malampaya project has been producing cleaner-burning natural gas for three power plants at Batangas, on the country’s largest and most populous island of Luzon. The power plants have a combined generating capacity of 2,700 megawatts – enough to meet up to 30% of Luzon’s electricity needs, or about 20% of the country’s total electricity requirements.

Shell successfully completed Malampaya Phase 2 in 2013, which added two new production wells. Malampaya Phase 3 saw the design, fabrication and installation of a new depletion compression platform to maintain levels of gas production, which began operating in October 2015. This was the first oil and gas platform to be designed and built in the Philippines, and its successful completion has made the country a player in construction for the oil and gas industry.

Technology

The project extracts natural gas and condensate from the depths of the Palawan Basin. A nearby shallow-water production platform processes the gas and exports it through a 504-km (313-mile) underwater pipeline to a gas plant on shore. This processes the gas further and sends it to three power plants in Batangas.

In February 2015, Shell towed the Malampaya Phase 3 depletion compression platform from its construction yard out into the West Philippine Sea, where self-installation technology lowered its 80-metre legs, positioning it next to the existing platform. Self-installation takes away the need for large vessels specialising in offshore platform installation. Most importantly, its use on Malampaya Phase 3 minimised interruption to gas production.

Both platforms are designed to withstand typhoons and earthquakes, a challenge unique to this region.

Environment and society

The flow of indigenous natural gas from the West Philippine Sea is helping to fuel the Philippines’ economic growth and progress. Shell supports health improvement, livelihood generation programmes and environmental conservation efforts through its partner foundations in Palawan, Oriental Mindoro and Batangas.

In 2002, the United Nations Environmental Programme and the International Chamber of Commerce selected the Malampaya project for the World Summit Business Award for Sustainable Development in Partnerships. The project was rewarded for achieving a careful balance of social, environmental and economic components during its development.

Pilipinas Shell Foundation, the social arm of Shell in the Philippines, works with the province of Palawan to implement a USAID programme called Movement Against Malaria in more than 300 villages on Palawan island. The programme has set up centres in each village to provide early diagnosis and prompt treatment of malaria.

Beyond providing power for large cities and industries, the Malampaya project aims to bring sustainable and affordable energy to communities least likely to be connected to the grid. Pilipinas Shell Foundation has also put in place a micro-grid using hydropower and solar energy to power the village of Kalakwasan on Palawan island. The village is home to the Batak indigenous people. Today all homes in Kalakuasan are powered by the mini-grid and tribesmen are trained to operate and maintain the system.

Malampaya is located in one of the most biologically diverse areas of the world, known as the Coral Triangle. Its waters are important for biodiversity and vital for the livelihoods of many local villages which depend on them for fishing. But the species-rich waters and corals are under threat from natural phenomena such as storms, illegal fishing and over-fishing. The Malampaya Foundation, the project’s social arm set up by the joint venture partners, is working with communities to help manage and restore their local marine resources and enhance livelihoods.

Building local skills and expertise

Malampaya Phase 3 included the first offshore platform to be designed and built completely in the Philippines, and brought new technical expertise into the country. Shell is helping to raise project expertise to world-class levels in the long term, enabling the Philippines to compete for future oil and gas projects regionally and globally.

The third project phase has provided more than 1,200 new jobs for Filipinos, generated business for local companies, and is improving the skills of local workers. More than 90% of those operating the platform are Filipinos.

Poor and unemployed young adults from local communities can gain skills for jobs in areas such as welding, pipe-fitting, and construction as part of a vocational training programme run by the Malampaya Foundation. The programme, called Bridging Employment through Skills Training (BEST), links trainees with industries in need of skilled workers. Since 2007 more than 4,000 young adults have graduated from this programme, 80% of whom have found work in the Philippines or abroad.

Safety training is mandatory before anybody is allowed to work on the Malampaya project. In 2013, the Malampaya Health, Safety and Environment (HSE) Training Centre opened. It has trained more than 6,000 Filipinos to world-class HSE standards.
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Re: [Philippines] Malampaya

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MALAMPAYA BEGINS GAS PRODUCTION FROM NEW OFFSHORE PLATFORM
Oct 05, 2015

The Malampaya natural gas field will continue to power a third of homes and businesses in the Philippines, thanks to a new offshore platform that is the country’s first to be designed and built in the country.

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Malampaya joint venture partners press the start button to officially inaugurate the new Depletion Compression Platform. In photo are (L-R): PNOC-EC President Pedro Aquino, Chevron Malampaya LLC Managing Director Sabino Santos (partly hidden), PNOC-EC Chairman and CEO Gemiliano Lopez, Chevron Indo-Asia Business Unit Managing Director Charles Taylor, Department of Energy Secretary Zenaida Monsada, SPEX Managing Director Sebastian Quiniones, Malampaya Phase 2/3 Project Manager Antoine Bliek, Royal Dutch Shell Chief Financial Officer Simon Henry, Shell companies in the Philippines Country Chairman Edgar Chua and Shell General Manager – East Operated Projects Simon Ong.

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The newly inaugurated DCP (left) is linked to the existing Malampaya Shallow Water Platform (right) and will maintain the level of gas production to continue supplying about a third of the Philippines’ power requirements.

Malampaya Deep Water Gas-to-Power project joint venture partners - Shell Philippines Exploration, B.V. (SPEX), Chevron Malampaya LLC (Chevron) and the Philippine National Oil Company- Exploration Corporation (PNOC-EC) - led a ceremony at the Makati Shangri-La Hotel today to inaugurate the new platform, and mark the start of gas production.

Commenting on this milestone, Philippine Department of Energy Secretary Zenaida Monsada said: “We take great pride in the completion of this complex and challenging project. This is the first offshore platform to be designed and constructed in the Philippines. This is another landmark accomplishment for the upstream petroleum industry in the country.”

The new offshore platform – a Depletion Compression Platform (DCP) - is adjacent to the existing Malampaya Shallow Water Platform, located some 50km offshore from Palawan in western Philippines.

Combined with the successful drilling of two new production wells, which were completed in 2013, the new offshore platform will maintain the level of gas production to fulfill commitments under existing gas sales agreements, thus ensuring the steady supply of natural gas to power the Luzon electricity grid.

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The self-installing technology of the Malampaya DCP enabled the platform to be installed without the need for large specialized installation vessels

Today’s event also commemorates the 25th anniversary of Service Contract 38 (SC38), which laid the foundation for the Malampaya Deep Water Gas-to-Power Project. The late President Corazon C. Aquino signed SC 38 on behalf of the Government in December 1990.

“This latest phase in Malampaya is a continuation of the Malampaya Deep Water Gas-to-Power Project’s positive legacy to the Philippines by providing the country a safe, reliable, and cleaner energy resource,” SPEX Managing Director Sebastian Quiniones said. “The project also promotes inclusive growth by elevating the capability of the Filipinos to world-class standards.”

A team of more than 1,400 Filipino workers took about two years to build the platform at the Keppel Shipyard in Subic, Zambales. Fabrication was completed with an impressive safety record of 11.8 million safe man hours.

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Built by over 1,400 Filipino workers, the Malampaya Depletion Compression Platform is the first offshore platform to be fully designed and constructed in the Philippines.

The self-installing technology of the platform was a first of its kind for operator Shell and enabled the platform to be installed without the need for large specialized installation vessels. The platform was built to float and was towed from Subic to the Malampaya location, offshore Palawan. The inbuilt jacking system enabled the 80-metre legs to be jacked down and lift the platform from the water into its final position. Both the existing Shallow Water Platform and the new Depletion Compression Platform are designed to withstand the typhoons and earthquakes which the Philippines experiences.

“Malampaya is a symbol of the country’s continuous journey towards energy self-sufficiency. The commissioning and startup of its latest phase is a testament to what the Filipino workforce can achieve to fuel the country’s growth and progress,” Quiniones added.
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Re: [Philippines] Malampaya

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About Malampaya:
  • The Malampaya Deep Water Gas-To-Power Project is one of the greatest industrial undertakings in the history of the Philippines.
Acknowledged as one of the best examples of a highly successful public-private partnership, the project is spearheaded by the Department of Energy and developed and operated by SPEX, on behalf of joint venture partners Chevron Malampaya LLC and the Philippine National Oil Company-Exploration Corporation.
  • Malampaya fuels three natural gas-fired power stations with a total generating capacity of 2,700 megawatts to provide 30% of the country’s energy needs.
  • The construction of the new Malampaya platform generated more than a thousand direct jobs as well as more business for local companies supporting the project. Workers tapped for the construction underwent mandatory training to elevate their competencies to meet world-class standards. The Malampaya Health Safety and Environment Training Center has so far upgraded the skills and technical knowhow of more than 6,000 Filipino workers to international standards recognized by the Offshore Petroleum Industry Training Organisation.
  • This latest phase in Malampaya has placed the Philippines on the world map of oil and gas platform fabrication, and demonstrates the excellent technical capability of the Filipino workforce. The country now has a competitive edge in pitching for future oil and gas projects in the region and worldwide.
  • The Malampaya Foundation Inc. (MFI), the social arm of the Malampaya Deep Water Gas-to-Power Project, has implemented various Social Investment programmes in communities where it operates. The Bridging Employment through Skills Training (BEST), Galing at Negosyo Dulot ay Asenso (GANDA) and Sanayan sa Ikauunlad ng Kakayahang Pangkabuhayan (SIKAP) programmes teach beneficiaries from Subic and Palawan new skills that help them gain employment or establish their own businesses. The various Social Investment programmes implemented by MFI has benefitted more than 5,000 Subic locals and more than 500 Palawan locals in a span of three years.
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Re: [Philippines] Malampaya

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Shell signs agreement to sell interest in Malampaya, Philippines

May 20, 2021

Shell Petroleum N.V. has signed an agreement with Malampaya Energy XP Pte Ltd (a subsidiary of Udenna Corporation), for the sale of its 100% shareholding in Shell Philippines Exploration B.V. (SPEX). SPEX holds a 45% operating interest in Service Contract 38 (SC38), which includes the producing Malampaya gas field. The other partners in SC38 are UC38 LLC, a subsidiary of Udenna Corporation (45%), and Philippine National Oil Company Exploration Corporation (10%).

Malampaya began its commercial operations in 2002. SPEX holds the technical skills, manpower and technology employed in day to day operations, providing the Philippines with indigenous gas that powers a significant portion of the country’s growing electricity demand. The major components of Malampaya include the following: subsea wells and flowlines, a shallow water platform and a depletion completion platform to process natural gas, a catenary anchored leg mooring-buoy for the export of liquid condensate, a 504-kilometer long gas export pipeline on the seabed, an onshore gas plant and pipeline in Batangas City.

The base consideration for the sale is US$380 million, with additional payments of up to US$80 million between 2022 to 2024 contingent on asset performance and commodity prices. Subject to partner and regulatory consent, the transaction is targeted to complete by the end of 2021. The transaction has an effective date of January 1, 2021

“Since it began commercial operations in 2002, Malampaya has supplied a significant portion of the Philippines’ energy demand and it will continue powering the country with indigenous gas following a safe transition of the asset and its experienced workforce,” said Wael Sawan, Shell’s Upstream Director. “Today’s announcement is consistent with Shell’s efforts to shift our Upstream portfolio to one that is focused on nine core positions.”

SPEX received its license to operate in the Philippines in 1991. Since then SPEX have become operator of Malampaya to explore and develop SC38 offshore Northwest of Palawan.

SPEX staff will continue their employment under the new ownership, providing continuity and contributing to ongoing operational reliability and safety. Malampaya and its staff have made significant contributions to the Philippines and to the local community over the past two decades and are expected to continue playing an important role in providing energy for the Philippines.

This deal has no impact on other Shell businesses in country. The Philippines remains an important country for Shell after over a century of successful operations. Shell will continue to pursue opportunities in the Philippines where it can leverage its global expertise in line with its strategy.
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