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May 15, 2023 Jester P. Manalastas 187 views

SPEAKER Ferdinand Martin G. Romualdez has 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 joined other government officials in witnessing the signing of Ferdinand “Bongbong” R. Marcos Jr., the renewal agreement of SC 38, originally set to expire on February 22, 2024, extending it for another 15 years. at the Malacañang Palace.

“This is a welcome development as the Malampaya gas field provides a significant portion of our country’s energy requirement,” Romualdez said.

President Marcos himself noted that Malampaya provides fuel for 20 percent 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,” Romualdez also 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.

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.

Energy Secretary Raphael Lotilla said the loss of Ilijan has contributed significantly to the thin reserves in the Luzon grid and helped push 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.

Deputy Speaker and Batangas Representative Ralph Recto said: “The Malampaya gas is a bulwark of our energy security. It fuels base-load power plants in my home province of Batangas.”

He added that at one point, it provided 40% of the energy needs of the almost 57 million people living in the world’s 4th most populous island.

“The extension of the Malampaya Service Contract for 15 years not only guarantees our supply of that strategic fuel, but retains our presence in an area regarded as harboring big oil and gas deposits. Corporations require regulatory stability to put in more investments, and the extension of the contract provides the stable business climate that will ensure that this national resource will be harnessed for the greater good.

“When Malampaya goes dry, Luzon goes dark. That is how important it is,” Recto said.