Prime Energy plans $187M for Malampaya Phase 4 in 2024
PRIME Energy Resources Development B.V. announced on Thursday a plan to spend $187 million (around P10.4 billion) next year for the Malampaya Phase 4 project.
The project involves drilling at least two deepwater wells in the Camago and Malampaya East fields by 2025, with the potential for commercial gas production pending successful drilling results, Prime Energy said in a statement.
“If the drilling is successful and proves that gas reserves can be produced commercially, the necessary pipelines will be installed and tied into the existing Malampaya production facilities,” the company noted.
“Production from the new wells is expected in 2026,” it added.
Extensive investment is crucial for the execution of the project, requiring advanced drilling equipment, subsea equipment, umbilicals, pipelines, and securing a drilling rig, according to Prime Energy Managing Director Donnabel Kuizon Cruz.
“The planned drilling and development requires an investment of more than $600 million,” she said.
Prime Energy and its partners secured a 15-year renewal of Service Contract No. 38 (SC 38) until 2039, signed by President Ferdinand R. Marcos, Jr. and Secretary of Energy Raphael P.M. Lotilla on May 15 this year, paving the way for exploration and development of additional gas reserves.
“To underpin the significant investment required, Prime Energy and its partners have sought the support of the DoE (Department of Energy) to ensure that there is a market for the new gas volumes, and to streamline and simplify the permits and requirements imposed by various government agencies which could hamper the completion of Malampaya Phase 4 on time and within budget,” the company said.
At the same time, Prime Energy said that China has not claimed the Malampaya contract area, expressing confidence in uninterrupted drilling and development activities set to take place in 2025 and 2026.
Last week, Mr. Marcos cited the need to address “issues” in the South China Sea to initiate energy exploration projects before the depletion of the Malampaya.
In May, Mr. Marcos said that the government would continue talks with China regarding claims and concerns about the Malampaya gas fields.
“The only way to resolve the issues that are outstanding is to once again keep talking and to come to a consensus to come to an agreement and to continue to negotiate,” Mr. Marcos said in a May 5 statement.
The Malampaya consortium is composed of Prime Energy, Udenna Group’s UC38 LLC, and the state-owned Philippine National Oil Energy Corp.
Prime Energy, a subsidiary of Prime Infrastructure Capital, Inc., holds a 45% operating stake in the Malampaya consortium.
The Malampaya gas field, the country’s sole natural gas provider, is expected to be depleted by 2027.
Malampaya is located in the West Philippine Sea, about 65 kilometers offshore from Palawan. It produces around 146 billion cubic feet of gas per year, according to the Energy department. — Sheldeen Joy Talavera
