Prime Energy has started producing gas from two new deepwater wells off Palawan in the Philippines, completing a nearly $1 billion expansion of the Malampaya development, Offshore Energy reported. The Malampaya Phase 4 project connects the Malampaya East-1 and Camago-3 wells to existing production facilities, adding domestic fuel supplies for gas-fired power stations serving the Luzon grid.
President Ferdinand R. Marcos Jr., energy department officials and partners in the SC 38 joint venture attended a ceremonial gas flow at the project’s onshore plant in Batangas City on 5 November. Prime Energy, a subsidiary of Prime Infrastructure Capital, completed the development 27 months after the final investment decision, about five months earlier than originally scheduled, according to the report.
The expansion adds an estimated 222 billion cubic feet of recoverable gas. Offshore Energy reported that this volume could generate approximately 31.46 billion kilowatt-hours of electricity, equivalent to the annual consumption of 13.11 million Filipino households. Initial well tests indicate that the additional reserves could prolong Malampaya’s productive life by about six years, although the duration will depend on future gas offtake. Integration and production increases will continue over the coming months, with sustainable output levels to be determined from operating data.
The development marked the Philippines’ first offshore drilling campaign in more than a decade. Alongside drilling the wells, the project required subsea infrastructure linking them to the existing platform. Its supply chain covered 17 countries and involved specialist equipment, components and technical personnel. Philippine fabrication and manufacturing businesses also supported the work.
The additional gas will travel through Malampaya’s transmission system to Batangas and onwards to power plants supplying Luzon. Marcos said greater use of domestic resources could help contain electricity costs by reducing reliance on imported energy exposed to international price swings. According to Prime Energy, as cited by Offshore Energy, Malampaya gas has been cheaper than imported spot liquefied natural gas over the past decade, with the gap at times exceeding $4 per million British thermal units. The company cautioned that electricity tariffs also depend on plant operations, market conditions and supply agreements.
Malampaya began commercial operations in 2001 and supplies plants supporting roughly one-fifth of Luzon’s electricity needs. The report said SC 38 has generated more than $14 billion in Philippine government revenue since production started.