Natural gas output expected to decline 7% in 2019

Date Published (mm/dd/yyyy): 
01/30/2019

DOMESTIC PRODUCTION and demand for natural gas are expected to decline in 2019 because of the scheduled five-day maintenance of offshore Malampaya gas-to-power platform in October, the Energy department said.

 

Production this year is projected to drop by 7% to 141,255 million standard cubic feet (mmscf), down from 151,949 mmscf last year, it said.

 

“This maintenance schedule affects the operation of all natural gas power plants including the PSPC (Pilipinas Shell Petroleum Corp.) refinery. Maintenance activities for all natural gas-fired power plants including the refinery are expected to be implemented during 2019,” the DoE said in its latest natural gas report.

 

Demand is seen to decline by 7.8% to 135,771 mmscf because of the volume of nomination of natural gas because of the scheduled shutdown as well as the implementation of maintenance activities of the power plants — the main consumers of natural gas.

 

Power plants, the biggest users of natural gas, are expected to use 132,498 mmscf this year, down 7.9% compared with last year’s 143,794 mmscf.

 

“The decline in utilization of power generation is attributed to the implementation of major maintenance program of the respective natural gas power plants such as Kepco Ilijan, Sta. Rita and San Lorenzo within the year,” the DoE, which also pointed to the maintenance activities as a reason for the expected decline.

 

“However, the natural gas-fired power plants will still operate using alternate fuels such as diesel and condensate,” it said.

 

In 2018, the country’s natural gas production increased by 8.33% to 150,804 million mmscf, showing the importance of the locally sourced fuel.

 

“The Philippines continued to be self-sufficient in natural gas with 100% of its production coming from offshore Malampaya gas field,” the DoE said.

 

It said the increase in the volume of supply was the result of the gas field’s production availability of 98.5% with an average daily gas production to customers of 399 mmscf.

 

“Also, there was no maintenance activity conducted by the operator in the platform during the year,” the DoE said.

 

Natural gas accounted for 34% of Luzon’s power generation mix, the DoE said, along with energy sources such as coal, oil, hydro, geothermal and renewable energy sources like wind, solar and biomass.

 

In terms of demand, the country’s requirement last year reached 145,273 mmscf, up 8% from 134,511 mmscf in 2017.

 

“The overall increase in the volume of utilization was due to the full operation of the five natural gas power plants and the refinery located in Batangas,” the department said.

This suggests a volume disparity of 5,531 mmscf between what has been supplied from the Malampaya gas field against the actual recorded demand.

 

“The difference can be attributed to flaring, gas heating, venting and purging of natural gas at the platform, onshore-gas-plant (OGP) facility own use power plants, and linepack in the 504 [kilometer] natural gas pipeline,” the DoE said.

 

Power generation accounted for the biggest share in usage at 98%, with the industrial sector making up the remaining 2%.

 

Total demand for natural gas in the power generating sector was 142,723 mmscf, up 7.91% from 132,256 mmscf previously.

 

Last week, DoE Secretary Alfonso G. Cusi said he asked the operator of the Malampaya platform about any upcoming shutdown.

 

Shell Philippines Exploration B.V. (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.

 

“Another question is, what are the preparatory measures that are being undertaken that there will be feedstock, fuel, for the plants that are dependent on them,” Mr. Cusi said

Reference:

Saulon, V. V. (January 30, 2019). Natural gas output expected to decline 7% in 2019. Business World. Retrieved from https://www.bworldonline.com/natural-gas-output-expected-to-decline-7-in-2019/