Malampaya maintenance work successful–Shell exec

by Lenie Lectura, 13 April 2015
from BusinessMirror

THE Malampaya facility is expected to resume supplying natural gas today (Tuesday), according to a top official of Shell Philippines Exploration

B.V. (Spex), the upstream company of Shell in the Philippines in charge of operating the Malampaya Deepwater Gas-to-Power Project.

The facility went offline on March 15. Spex had to shutdown the facility for 30 days to give way for  the platform installation aimed at maintaining the fuel supply to three power plants with a total capacity of 2,700 megawatts (MW), providing about half of Luzon’s power needs.

These power plants are the 1,000-MW Santa Rita, 50-MW San Lorenzo and 1,200-MW Ilijan.

In an interview, Spex Managing Director Sebastian Quiniones said the 30-day maintenance work was successful. “We will be back at 12 midnight later. That’s as of April 14,” he said on Monday morning. “Everything went as planned.”

Quiniones stressed the importance of the scheduled shutdown, saying the tie-in of the second offshore platform will help sustain the 2,700-MW production level of the three power plants.

This, he said, will address the natural decrease in pressure of the reservoir and help ensure long-term supply security for the country. The tie-in of the second platform was conducted together with regulatory inspection of pressure vessels and execution of maintenance activities.

The Spex official also said the scheduled maintenance is no ordinary shutdown as a 13,000-ton platform was transported 383 kilometers across the West Philippine Sea. The tie-in of the second platform worth $765 million was installed to an existing platform.

Spex said for more than 13 years now, the Malampaya gas project has produced safe and reliable energy for the country. The project is operated with specifically and carefully scheduled maintenance programs to ensure the continued integrity of the facility.

During the shutdown, the Malampaya facility was not able to fuel the three power plants.  But the three power facilities were still able to produce power, as they shifted to liquid fuel from natural gas. Thus, power rates went up this month by P0.27 per kilowatt-hour (kWh).

According to the Manila Electric Co. (Meralco), the upward adjustment was mainly brought about by a P 0.20-per-kWh adjustment in the generation charge, which moved from P5.21 per kWh to P5.41 per kWh. The generation charge is the portion of the bill that goes to the power plants that produce electricity.

The utility firm said the shutdown of the Malampaya facility forced power plants to use more expensive liquid fuel to continue operations. In particular, the Santa Rita and San Lorenzo plants shifted to condensate, while Ilijan used biodiesel.

These types of alternative fuel are more expensive than the natural gas from Malampaya, which the plants normally use.

As a result of the shift to liquid fuel by the three plants, rates of the independent power producers (IPPs) and power supply agreements (PSAs) increased. Rates of the IPPs went up by P0.17 per kWh. Meanwhile, rates from PSAs went up by P 0.31 per kWh.

Meralco warned that generation charge for next month could also go up. It said that due to the longer impact of the Malampaya maintenance schedule (from March 26 to April 13) for the April supply month and the expected higher temperature in the coming days, electricity consumers may also expect an increase in their bills.