CITING the nearing depletion of gas output from the Malampaya natural gas field, the second-biggest source of electric power on Luzon island, the Senate Energy committee chief prodded government to secure replacement fuel to avert brownouts.
Sen. Win Gatchalian said the absence of replacement fuel could threaten energy security and might lead to possible rotational brownouts.
Gatchalian also noted the need for a complementary law to cover requirements of the midstream natural gas industry, where several investors have forayed the past few years.
The Malampaya project has been supplying fuel to the Luzon electricity grid, servicing for nearly two decades about 21 percent of the national demand for electricity, he noted. It is expected to run dry by 2024.
The chairman of the Senate Committee on Energy filed Senate Bill 1819 for the country to provide a national energy policy and framework for the development and regulation of the Philippine midstream natural gas industry.
“We’re racing against time. If we fail to act now, we could be experiencing anew a debilitating rotational brownout by 2024 once our power supply from the Malampaya gas field is depleted,” warned Gatchalian.
He cited the power crisis in the 1990s when Metro Manila and several provinces in the Luzon power grid experienced rotating brownouts of up to four hours daily due to insufficient electrical generating capacity.
Gatchalian, meanwhile, noted the need for a complementary law to cover the aspects of the midstream natural gas industry, including the transportation, transmission, storage, and marketing of natural gas in its original or liquefied form or commonly known as liquefied natural gas or LNG.
The midstream natural gas industry covers companies that specialize in operating tanker ships or marine vessels to deliver natural gas to LNG terminals, pipelines or transmission systems and storage facilities.
Several local and foreign companies have in the past expressed interest in putting up integrated LNG facilities in the country. Such facilities include storage, regasification, and transmission.
The LNG terminal projects should be in place before the anticipated depletion of gas output from Malampaya in 2024.
“The proposed Midstream Natural Gas Industry Development Act will encourage private capital and foster an open and fair competitive market while at the same time ensure safe, reliable and environmentally responsible operation of LNG terminals,” the senator said.
The proposed legal framework for the midstream natural gas industry will also ensure consumer protection as it will mandate a transparent and competitive pricing of services, Gatchalian said.