Philippines' PXP eyes Malampaya facilities for South China Sea gas project

MANILA, Nov 12 (Reuters) - PXP Energy Corp PXP.PS said on
Tuesday it has submitted an unsolicited proposal to the
Philippines' Department of Energy to develop and utilise the
Malampaya natural gas facilities in the South China Sea for a
planned integrated gas hub venture.
The Malampaya gas-to-power project, developed and operated
by Shell Philippines Exploration BV on behalf of joint venture
partners Chevron Malampaya LLC and state-owned PNOC Exploration
Corp, began commercial operations in 2001.
Malampaya, which fuels power plants with a combined capacity
of more than 3,000 megawatts, is expected to be depleted within
the next decade, with the government-issued Service Contract No.
38 covering the project expiring in 2024.
PXP said it is looking to take control of the facilities
after the contract expiry, "to support continued development of
the Malampaya resources as well as the economic development of
Sampaguita Field and other nearby prospects".
Sampaguita is a natural gas prospect in the Reed Bank in the
South China Sea covered by Service Contract No. 72 issued to
PXP's Forum Energy unit.
The project has been hampered since late 2014, when the
government indefinitely suspended drilling activities in the
Reed Bank amid a territorial dispute with China.
The Malampaya infrastructure and distribution network is
"strategically positioned in the West Philippine Sea", PXP said
in a stock exchange filing, using the local name for the South
China Sea.
"The project intends to ensure energy security to the
country from indigenous natural gas resources for the next 25
years and beyond, while bringing in significant revenues to the
Philippine government," it said.
Energy Secretary Alfonso Cusi told Reuters he has "not seen
and studied the proposal".
PXP also said it has expressed interest to buy Chevron's 45%
ownership of Service Contract No. 38.
It did not disclose financial details of the twin proposals.
PXP is among several groups looking to develop an integrated
gas hub ahead of Malampaya's depletion.
Power producer First Gen Corp FGEN.PS , which has partnered
with Japan's Tokyo Gas Co Ltd 9531.T , has completed
"significant pre-development work" for a planned liquefied
natural gas (LNG) terminal. In March, Phoenix Petroleum Philippines Inc PNX.PS and
Chinese partner CNOOC Gas and Power signed a deal to add
state-owned Philippine National Oil Company, parent of Malampaya
stakeholder PNOC Exploration, to a planned LNG hub venture.
Australia-listed Energy World Corp Ltd EWC.AX is also in
the race, with an LNG project in Pagbilao province in Luzon
nearing completion.

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Philippines' First Gen starts work on LNG terminal JV project
with Tokyo Gas team up with Philippines' PNOC on LNG hub project
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