President Ferdinand "Bongbong" R. Marcos Jr. signs the Renewal of the Malampaya Service Agreement Contract Monday morning at Malacañang Palace. Witnessing the event are (from left to right) Chief Presidential Legal Council Juan Ponce Enrile, Executive Secretary Lucas Bersamin, Speaker Ferdinand Martin G. Romualdez, Energy Secretary Raphael Lotilla, Justice Secretary Crispin "Boying" Remulla, Presidential Communication Office Secretary Cheloy Garafil and Chairman Prime Infra Enrique Razon.
SPEAKER Ferdinand Martin G. Romualdez on Monday lauded the renewal agreement for Malampaya Service Contract No. 38 (SC 38), which should help stabilize the prices of electricity and prevent brownouts that result in business losses and causes the suffering of the Filipino people.
Romualdez was among the government officials who witnessed President Ferdinand “Bongbong” R. Marcos, Jr. sign at the Malacañang Palace the renewal agreement of SC 38, originally set to expire on February 22, 2024, extending it for another 15 years.
“This is a welcome development as the Malampaya gas field provides a significant portion of our country’s energy requirement,” Speaker Romualdez said.
President Marcos himself noted that Malampaya provides fuel for 20% of Luzon’s energy requirement.
“Extension of the SC 38 will not only reduce our dependence on imported oil as fuel for our power plants, which will help stabilize the price of electricity. More importantly, it would help boost our power reserves and prevent brownouts resulting in losses for businesses and suffering for our people,” Speaker Romualdez said.
He added that the extension of the SC 38 will provide a steady supply of electricity as the Marcos administration pursues its long-term strategy of securing additional energy sources to drive down power costs and prevent outages.
“The House of Representatives supports the initiatives of the administration of President Marcos, including its agenda to promote our energy security,” Speaker Romualdez said.
It could be recalled that last week Speaker Romualdez secured the commitment of party leaders during a caucus at the House of Representatives for the passage of the majority if not all of the 13 remaining priority measures of the Marcos administration listed under the Legislative-Executive Advisory Council (LEDAC) before the sine die adjournment of Congress on June 3, 2023.
Included among these priority measures is the amendment to the Electric Power Industry Reform Act (EPIRA).
According to the Department of Energy (DoE), the extension of the Malampaya service agreement will ensure a continued supply of natural gas to the 1200 MW Ilijan Power Plant which is set to resume operation in late May this year.
Ilijan, which provides around 15% of Meralco’s peak demand for electricity, has not been in operation since June last year due to retrofitting and because its gas supply agreement with Malampaya ended on 5 June 2022.
DoE Secretary Raphael Lotilla said the loss of Ilijan has contributed significantly to the thin reserves in the Luzon grid and helped pushed up electricity spot prices.
Aside from continuing the production operation, SC 38 is required under the renewal agreement to conduct geological and geophysical studies, aside from drilling of at least 2 deep water wells from 2024 to 2029.
The SC 38 consortium is likewise required to conduct exploratory drilling further away from the Malampaya production area, to retain the exploration areas.
