Philippines $1 Billion Gas-Power Addition to Secure 2,700 Megawatts for Luzon

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The consortium operating the Malampaya deep-water-to-gas power project in the Philippines offshore Palawan region is set to begin the third phase of its additional investment in the gas field.

Royal Dutch Shell (NYSE:RDS) (The Hague, Netherlands) Philippines Exploration BV and its joint venture partners Chevron Corporation (NYSE:CVX) (San Ramon, California) Malampaya LLC and PNOC Exploration Corporation (Philippine National Oil Corporation, Manila) own the Service Contract 38 (SC 38) license. They will hold a strike steel ceremony on Friday this week at the Keppel Subic shipyard in Zambales to signal the commencement of Malampaya Phase 3. The event will see the ceremonial cutting of the steel plate that will form the mold for the platform base.

By implementing phases 2 and 3, the SC 38 consortium will be able to ensure the continued supply of natural gas to three priority power generating facilities in Luzon. The Malampaya field supplies natural gas to the 1,200 megawatt (MW) Ilijan power plant of Korea Electric Power Corporation (NYSE:KEP) (KEPCO) (Seoul, South Korea), the 1,000 MW Sta Rita plant and the 500 MW San Lorenzo plant. The power from these three plants are all located in Batangas, which provides 40% to 45% of electricity generated in Luzon.

The $1 billion in additional investment in the existing $4.5 billion Malampaya power project is being divided between for phases 2 and 3. SC 38 is investing $250 million for the drilling and development of two additional wells which are scheduled for completion in February 2014.

Phase 3 of the project will see the investment of $750 million for the installation of the yard where additional equipment and facilities will be housed by December 2015.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.