Petroleum association touts potential of PHL gas in lowering power prices

THE PHILIPPINES needs to maximize its use of domestic natural gas to reduce dependence on overseas energy and relieve pressure on electricity prices, the Petroleum Association of the Philippines (PAP) said.

“There’s an opportunity to fully implement the (upstream) natural gas law by maximizing indigenous gas,” PAP Chairperson Donnabel Kuizon Cruz told a Senate hearing last week.

“We still have capacity there that we can use and push into our power generation companies so we can help reduce the price,” she added.

Proposals are being floated to suspend petroleum taxes to mitigate high pump prices. Energy Sharon S. Garin earlier warned of a potential 16% increase in electricity rates by April, driven by surging fuel costs.

Signed into law last year, Republic Act No. 12120, or the Philippine Natural Gas Industry Development Act, aims to develop the natural gas industry.

The law exempts indigenous natural gas and electricity generated from it from value-added tax, providing some relief to consumers, Ms. Cruz said.

Ms. Cruz, who also serves as the president and chief executive officer of Prime Energy Resources Development B.V., the operator of the Malampaya Deep Water Gas-to-Power Project, said using domestic natural gas offers significant advantages over importing liquefied natural gas (LNG).

Earlier this year, Prime Energy confirmed commercially viable quantities of natural gas at the Malampaya field.

Ms. Cruz said that electricity generated from the Malampaya gas field costs around P4.80 per kilowatt-hour (kWh), against P10.30 per kWh for imported LNG.

“That’s how big the difference between our own fuel is, compared to imported gas today,” she said.

Ms. Cruz said the Iran war should prompt the Philippines to turn more to domestic fuel.

“The Iran conflict underscores the importance of having our own resources, our indigenous or domestic fuel sources such as indigenous gas, our own oil sources, and indigenous coal,” she said.

She said the government’s recent award of service contracts is also “very timely” if the crisis persists as the country can develop indigenous blocks that can unlock potential resources.

“Under the leadership of the DoE (Department of Energy), members of the energy sector have started to coordinate in this crisis and see how we can balance the fuel mix to help consumers during this time,” Ms. Cruz said. — Sheldeen Joy Talavera