Prime Infra to seek Malampaya service contract extension
PRIME INFRASTRUCTURE Capital, Inc. (Prime Infra) is seeking to extend the license for Service Contract (SC) 38 covering the Malampaya gas-to-power project, after Shell Petroleum N.V. (Shell Petroleum) announced the completion of the sale of its stake in the contract to a unit of Prime Infra.
“Prime Infra is committed to invest in critical infrastructure that supports the country’s urgent needs. We are excited to be part of the next phase of Malampaya, and to further the potential of SC 38 as we work on securing the license extension,” Prime Infra President and Chief Executive Officer Guillaume Lucci said in a statement.
The license expires in 2024.
In its own statement Tuesday, Shell Petroleum announced that its 100% stake in Shell Philippines Exploration B.V. (SPEX) was transferred to Malampaya Energy XE Pte. Ltd. (MEXP), a Prime Infra unit, effective Nov. 1.
“The Malampaya asset begins a new chapter as we continue to build on the legacy of this world-class installation in helping achieve national energy security and independence,” Enrique K. Razon, Jr., chairman of Prime Infra, said in the Prime Infra statement.
Prime Infra said it will work to sustain and expand gas production to meet growing domestic demand for power.
SC 38 covers the Malampaya project in northwestern Palawan. The other members of the SC 38 consortium are UC38 LLC holding, and PNOC Exploration Corp., which own a 10% and 45% interests, respectively.
Malampaya is approaching commercial depletion by 2027, with production dwindling starting this year.
The Department of Energy (DoE) said Malampaya supplies up to 20% of Luzon’s power requirements. With MEXP’s assumption of full ownership and control of Malampaya operator, Prime Infra said it will also rename SPEX to Prime Energy Resources Development B.V. (Prime Energy).
“The renaming of SPEX is already in process following the acquisition of SPEX shares,” Prime Infra said.
The DoE approved the sale of the stake of SPEx to MEXP last month, finding Prime Infra technically, financially, and legally qualified as an operator of the Malampaya gas-to-power project. — Ashley Erika O. Jose