Energy dep’t preparing Recto Bank gas contract

THE Department of Energy (DoE) said on Tuesday that it is preparing the service contract covering the resumption of exploration at Recto Bank, which it hopes will help make up for the impending loss of the nearly depleted Malampaya gas field.

“(Regarding) the gas field in Recto Bank, the department is working on the service contract to proceed (with exploratory drilling),” Energy Undersecretary Alessandro O. Sales said during the Philippines LNG and Gas summit. 

Recto Bank, also known as Reed Bank, is within the Philippine exclusive economic zone northwest of Palawan, in waters disputed with China.

The Malampaya gas field is the Philippines’ only domestic commercial source of natural gas, accounting for 20% of the Philippines’ total power requirement.

The Malampaya concession is due to expire in 2024, with output due to fall starting this year until it becomes commercially unviable by 2027.

Mr. Sales said that the department is also looking to discover other indigenous power sources to address a looming energy crisis.  

“In terms of renewable energy, the DoE is looking to address its intermittency issues,” Mr. Sales said, referring to the unsuitability of many renewables for baseload power, such as wind, which depends on constant gusts, or solar, which cannot generate power at night.  

He said intermittency issues can be resolved via liquefied natural gas (LNG), which must be imported. 

“LNG will serve as a transition fuel. A transition fuel in this context is low-carbon fuel substance like natural gas,” he added.

Mr. Sales said natural gas is projected to overtake coal in the Philippine power mix by 2040.

Laura L. Saguin, head of the DoE’s natural gas management division, said that a secure gas supply requires the development of “strategic” infrastructure like LNG receiving terminals.  

According to the DoE’s Natural Gas Development Plan, it has approved six LNG terminal projects, with operations targeted for between 2023 and 2025. — Ashley Erika O. Jose