Cayetano pushes for Gas Industry Development Act

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THE new chairperson of the Senate Committee on Energy, Sen. Pia Cayetano, saw up close the Philippines’ brightest jewel — the Malampaya offshore gas platform now being operated by the SC 38 Consortium led by tycoon Enrique Razon’s Prime Infrastructure Capital.

Natural gas, in fact, is starting to make its impact felt in a big way among the Philippines’ Southeast Asian neighbors.

Latest data showed that Indonesia held 35 percent of the region’s proven gas reserves, Malaysia held 25 percent and Vietnam, 17.9 percent. Myanmar, Brunei and Thailand’s proven reserves accounted for 12 percent, 6.2 percent and 4 percent, respectively.

As of 2022, Malaysia, Indonesia and Thailand were Southeast Asia’s top gas producers, according to the 2023 International Energy Agency’s (IEA) Statistical Review.

Gas extraction in the region in one year alone reached 210 billion cubic meters, which was topped by Malaysia (41 percent), Indonesia (29 percent) and Thailand (13 percent).

The IEA in a report said Southeast Asia’s annual gas production will grow by 50 billion cubic meters from 2030 to 2050.

Indonesia and Malaysia will continue to be on top of the list. While the Philippines’ gas production is minimal.

Cayetano’s visit to the Malampaya platform offered a peek into the potential of the Philippines’ only indigenous gas source to become not only the country’s main energy source but also its lifeline when everything else goes topsy-turvy.

Senate Energy Committee Chairman Pia Cayetano and Malampaya Gas field platform.

“When you experience this and you see the kind of investments that go into ensuring energy security and energy reliability, you will be impressed,” Cayetano said.

She said the need for developing the Philippines’ indigenous gas resource was crucial.

While the senator’s obvious search for more information she can use as head of the Senate’s energy committee was highly commendable, Cayetano was barely scratching the surface, which is understandable given the limited time she spent on the Malampaya platform.

She would surely preside over the fate of a bill pending at the Senate which could give fruition to her belief that indigenous natural gas is a game changer in the Philippine energy sector.

Senate Bill (SB) 2247, or the proposed Philippine Downstream Gas Industry Development Act, is historic in many ways.

At the outset, it recognizes that the Philippines has natural gas contrary to a former president’s remark that the country was poor because it did not have gas and oil. To transition to full renewable energy use, the need to keep power supply stable without disrupting the march to carbon neutrality is proving to be a tricky challenge.

Experts at the Department of Energy see the answer in liquefied natural gas, a cleaner alternative to a predominantly coal-driven energy sector.

SB 2247 seeks to make indigenous, or local, natural gas supply a priority in use for power generation

It seeks to fill gaps in the further development of Philippine natural gas resources, which we already have as evidenced by the Malampaya field.

The bill would make it a state policy to buy Filipino gas first, which would surely unlock and open the doors to a wave of investments unprecedented in the Philippine energy sector.

What the bill seeks to do, which hasn’t been done before, is to fix policy that would not only push the discovery of new natural gas wells but also give it priority for use in power generation over imported fuel, in this case, liquefied natural gas (LNG).

It would not only complement, but strengthen, the continued operation of Malampaya governed by Service Contract 38, which the Marcos administration extended for another 15 years.

The operators of Malampaya are already displaying world-class expertise in running the gas platform and are expected to bring this gold standard to the table when they start drilling up to three new wells, a commitment they made when SC 38 was renewed.

The timing of SB 2247 couldn’t be more perfect as it would lay the foundation for a truly Filipino gas industry that would shield us from the need to import LNG at exorbitant prices.

SB 2247 is now being fine-tuned by Cayetano’s committee.

Filipino Gas First is a policy that does not only have a patriotic ring to it. It’s also the most practical solution to keeping power generation costs low as indigenous gas is definitely less costly than imported LNG. On top of this, it is also a major income earner for the government.

Malampaya has already shown it can deliver in the most desperate of times. On April 16, when power supply was faltering, Malampaya gas was key to continuing the operations of power plants that supply 20 percent of the Luzon grid’s demand.

This was while other plants were deemed unreliable that the transmission company National Grid Corp. of the Philippines had to declare yellow and red alerts.

The response was quick on the part of the Malampaya operators, allowing the convenience of moving excess electricity from one grid to another in danger of falling short. It brought to fore a valuable lesson in problem-solving — brilliant ideas are worth nothing unless implemented.

Pushed by Cayetano, SB 2247 will help build a sustainable stable energy sector. The Philippines should draw priceless lessons from the experience of its neighbors, Indonesia and Malaysia. These two countries had rushed to develop their gas reserves to become the region’s biggest producers.


Facebook: Rigoberto Tiglao

X: @bobitiglao

Website: www.rigobertotiglao.com

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