THE Senate energy panel is studying how the extension of the Malampaya gas exploration contract will affect the projects competing to build the country’s first import terminal for liquefied natural gas (LNG).

Senator Sherwin T. Gatchalian, who chairs the Senate Committee on Energy, told reporters that Shell Philippines Exploration B.V. (SPEx) had briefed his office about its request to extend drilling in Malampaya beyond the 2024 contract term and possibly until 2029 to 2030.

“Ang request lang ng Shell is ma-extend sa kanila. ‘Extend mo ‘yung aming kontrata, explore namin ‘yun, extend namin ‘yung life nu’ng well until 2030.’ That is only a briefing to us by Shell (Shell is requesting that the contract extension is given to it. ‘Extend our contract, we will explore, we will extend the life of the well until 2030.’),” he told reporters on Wednesday after a Senate hearing on a separate energy issue.

SPEx, a unit of Anglo-Dutch company Royal Dutch Shell plc, is the operator of Service Contract 38 off Palawan, along with Chevron Malampaya LLC and the Philippine National Oil Co.-Exploration Corp. as joint venture partners.

The Department of Energy (DoE) previously expressed interest in taking over the operation of the Malampaya gas-to-power project once the consortium’s contract ends in 2024.

“But we also want to understand how will that affect the LNG terminal knowing there is now new prospects. Kasi kung ako ang LNG terminal, bakit naman ako mag-i-import pa kung meron pa pala kayo hanggang 2030. Matutulog lang yung $2 billion ko dito (Because if I were the LNG terminal owner, why would I import gas if there is existing supply until 2030. My $2 billion will just be idle.),” he said, referring to the expected cost of building an import terminal.

Two groups are in different stages of developing separate import terminals and have received a notice to proceed with the construction from the Department of Energy.

Phoenix Petroleum Philippines, Inc. signed a memorandum of understanding with CNOOC Gas and Power Group Co. Ltd. in June last year to study, plan, and develop a liquefied natural gas (LNG) receiving terminal project in the Philippines.

In December last year, First Gen Corp. signed a joint development agreement with Tokyo Gas Co., Ltd. to pursue the joint development of an LNG terminal within the Lopez-led company’s power generation complex in Batangas City

“It was just a briefing. It’s something new. It’s a new information that came from Shell. We have to inquire from DoE kung ano ang magiging strategy with the LNG (what the strategy will be with the LNG project),” Mr. Gatchalian said.

The senator previously questioned the capability of a government entity to take over the project. — Victor V. Saulon