BATU, Indonesia. Photo by Jes Aznar

Thursday, September 26, 2013

Notes from Malaysia (part two)

KUALA LUMPUR - Royal Dutch Shell Plc, the global energy giant, is now preparing for the next phase of the Malampaya project in offshore Palawan with the drilling of two wells, officials said in a summit here but declined to comment on allegations of funds misuse currently hounding the multi-billion peso project.

On the sidelines of Shell Malaysia's two-day Innovation Summit here, Matthias Bichel, Shell director for Projects and Technology said the company is now starting the compression plant for two wells it recently drilled as part of the next phase in the Malampaya project.

"We are working on the next phase in Malampaya. We have drilled recently two wells successfully, which add new resources to the base and we have just about started with the facilities for compression," he told reporters.

He said that the compression process would keep the gas flowing on the reservoir.

"That is a project we are working on and that is really to prolong the life of the feed. And I think that is an integral part in the upstream game," Bichsel said.

Shell Philippines Exploration BV and its joint partners Chevron Malampaya LLC and Philippine National Oil Co. – Exploration Corp. (PNOC-EC) operate the deep water-to-gas Malampaya project in offshore Palawan.
The $1-billion expansion of the existing $4.5-billion Malampaya power project involves two phases. For the second phase, this entails the drilling and development of two additional wells.
The third phase, meanwhile, involves the installation of the yard, as well as additional equipment and facilities. With an investment of $750 million, the second phase is targeted to be completed by December 2015.
Bichsel said next step would be is to serve what the reservoir can deliver.

"If the reservoir can deliver more then decisions will be made," he said.

Asked to comment on allegations that royalties paid to the government by the consortium went to fake non-government organizations set up by businesswoman Janet Lim Napoles, another official said it was a matter for Filipinos to look into.

"I cannot comment on that. It's for Filipino citizens to look into," said Karen Westley, general manager for Non Technical Risks, Integrated Gas at Shell.

In February this year, the Malampaya project proponents turned over $1.1 billion to the National Government.
The amount represents the government’s 2012 revenue from the pioneering natural gas project that supplies 2,700 megawatts or up to 45 percent of Luzon’s power requirements. 
In 2011, the Malampaya consortium also turned over $1.1 billion to the government.
Bichsel, meanwhile, also stressed the importance of having a masterplan for the liquefied natural gas (LNG) sector, which Energy Secretary Carlos jericho Petilla said may be in place by the end of the year.

"Sometimes we find that having a masterplan is actually a good thing and to really stitch it together so it makes most sense to find a solution.  The advantage of a masterplan is that you literally think from A to Z, from beginning to end and that flushes out bottlenecks. That's what a masterplan is all about," he said.