By Chloe Mari A. Hufana and Sheldeen Joy Talavera, Reporters
THE PHILIPPINES has made its first major natural gas discovery in greater than a decade, a development that might strengthen domestic energy supply and support rising power demand, President Ferdinand R. Marcos, Jr. said on Monday.
The reservoir, called Malampaya East-1, lies about 5 kilometers east of the present Malampaya gas field off Palawan province.
“This extra resource may help support the federal government’s efforts for the stabilization of our power supply,” Mr. Marcos said in a video posted on his Facebook page.
In a press release on Monday, Razon-led Prime Energy Resources Development B.V., the operator of the Malampaya deep water gas-to-power project, said that the newly discovered reservoir is estimated to carry an estimated 98 cubic feet of gas in place.
The invention is corresponding to roughly 14 billion kilowatt-hours of electricity a yr, enough to provide about 5.7 million households, 9,500 buildings or about 200,000 schools annually.
Initial tests showed the well flowing at about 60 million cubic feet of gas per day, a level Mr. Marcos said is comparable to the unique Malampaya wells and indicates strong productivity.
The find also includes condensate, a high-value liquid fuel that might further support efforts to stabilize the electricity supply, Mr. Marcos said.
The Philippines relies on imported gas and coal to fuel its power plants and industrial base, leaving the economy exposed to volatile global prices and provide disruptions.
The invention of latest reserves at Malampaya East‑1 offers a rare reprieve, potentially reshaping the country’s energy outlook. It is predicted to increase Malampaya’s role within the nation’s energy mix and reinforce domestic gas supply in the approaching years. Additionally it is expected to assist the Philippines reduce its dependence on coal.
Mr. Marcos said the drilling was led by Filipino engineers and accomplished without accidents or environmental incidents, underscoring what he described as responsible resource development.
Malampaya East-1 is the primary accomplished well under the Malampaya Phase 4 Drilling Campaign, which also includes the Camago-2 and Bagong Pag-asa wells.
The following steps involve the completion and testing of Camago-3, followed by the drilling of the Pag-asa exploration well to pursue additional gas resources.
In 2023, the Malampaya consortium — composed of Prime Energy, UC38 LLC, Prime Oil & Gas, Inc., and state-owned PNOC Exploration Corp. — secured a 15-year renewal of Service Contract No. 38 from the federal government, paving the way in which for the exploration and development of additional gas reserves until 2039. Drilling wells on the Malampaya gas field began last yr.
“Once we assumed operatorship, we committed to the President and the nation to breathe recent life into Malampaya and revitalize the indigenous natural gas sector. Today, we’re delivering on that commitment,” Prime Energy said.
Malampaya Phase 4 has been certified as an “energy project of national significance” by the Department of Energy (DoE), making it eligible for expedited permit processing perks.
“Natural gas is a critical bridge in our energy mix, supporting power reliability while we scale renewables, energy storage, and grid upgrades,” Energy Secretary Sharon S. Garin said.
“We’ll pursue this chance with discipline: maximizing value for Filipinos, upholding environmental stewardship, and ensuring that each milestone strengthens our national interest,” she added.
The DoE said it would proceed to work closely with the consortium and relevant agencies in moving forward to the subsequent steps — from technical evaluation, development planning, and all required regulatory and environmental safeguards.
GOOD NEWS
The gas discovery is “definitely excellent news for the Philippines,” in accordance with Rizal Business Banking Corp. Chief Economist Michael L. Ricafort.
He said the extra reserves will help boost local supply and reduce reliance on fuel and coal imports, which in turn could lower electricity prices and ease inflationary pressures.
“[This will] help fundamentally increase local supplies and reduce prices… [as well as] help reduce overall local electricity prices and slower inflation,” Mr. Ricafort said via Facebook Messenger, adding that natural gas is a comparatively cleaner energy source compared with coal.
Edgar Benedict C. Cutiongco, president of the Philippine Petroleum Association, said that the confirmation of the natural gas discovery at Malampaya East‑1, reaffirms the country’s geological potential and the continuing strategic value of upstream oil and gas development.
“Indigenous gas reduces import dependence, stabilizes baseload power, and shields consumers from global price volatility. The invention strengthens long‑term supply planning and supports a balanced energy transition,” Mr. Cutiongco told BusinessWorld.
He said that the numerous findings signal “regulatory continuity, geological prospectivity, and infrastructure longevity,” that are key aspects to draw capital into the Philippines.
“The Malampaya East discovery is a strategic milestone that advances national energy security, revitalizes upstream activity, and reinforces the Philippines as an investable energy market,” he said.
University of Asia and the Pacific Associate Professor George N. Manzano said having a domestic source of gas for power plants would make the Philippines less vulnerable to swings in imported fuel and movements in exchange rates.
“It could actually also function a buffer when global energy supplies are disrupted — for instance, during geopolitical conflicts or other shocks,” he said via Viber.
Mr. Manzano noted, nevertheless, that the transition from discovery to business operations will take time, and the extent of consumer relief will depend upon whether cost savings are passed on to consumers through lower electricity prices.
Juan Paolo E. Colet, managing director at China Bank Capital Corp., said the extra supply coming from the brand new gas reservoir should help make local gas-fired power plants more cost-efficient and competitive, which in turn could translate to cheaper and more reliable electricity.
“The newest discovery may encourage investor interest in other potential areas of natural gas deposits within the Philippines,” he said in a Viber message. “There are major domestic banks who’re able to support the sector.”
Peter Louise D. Garnace, an equity research analyst at Unicapital Securities, Inc., said that the foremost gas discovery is “a much-needed bridge fuel” because the country transitions to cleaner energy.
“With this ‘proof of life,’ we anticipate this success to ignite a brand new wave of exploration, boosting interest within the Department of Energy’s newly awarded service contracts as investors look to copy this win,” he said via Viber.