Malampaya operator told to explain gas supply restrictions

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    The Department of Energy (DOE) has ordered the operator of the Malampaya gas field to explain its gas supply restrictions implemented over the weekend that affected the delivery of fuel to natural gas power plants in the country.

    “These restrictions affect the electricity prices that consumers pay and they will have to be informed on the causes of price increases,” Energy Secretary Alfonso Cusi, said in a statement.

    Cusi said that the DOE already received information from the operator of the Malampaya gas field that the supply restrictions will be lifted yesterday but noted that higher prices may already adversely impact consumers as power plants were forced source an alternative fuel.

    Malampaya is currently operated by a consortium of Shell Philippines Exploration B.V. (SPEX) for 45 percent, Malampaya Energy XP for another 45 percent and the remaining 10 percent owned by the Philippine National Oil Co. (PNOC).

    However, SPEX is already in the process of transferring its stakes to Malampaya Energy pending the full approval of the purchase agreement.

    DOE said that while the government already promulgated a no pass-on provision in the rules of the competitive selection process in 2018, the current contracts of gas-fired power plants with the Manila Electric Co. (Meralco) are still not covered since they were signed before the enactment of the rule.

    Meralco earlier said that it is more costly for natural gas-fired power plants to run on liquid fuel with the absence of supply from Malampaya.