Editorial

Philippines gas supply crunch looming as Malampaya approaches end of life

3.3GW supply gap will need to be filled

Otavio Veras

Research Analyst, Asia Pacific Gas & LNG

Otavio focused on Southeast Asian gas & LNG markets

Latest articles by Otavio

View Otavio Veras's full profile

The Philippines’ only gas producing field, Malampaya, is expected to go into decline by the early 2020s. The field supplies 3.3 GW of gas-fired capacity. More than 96% of gas demand stems from the power sector.

How will this supply gap be met?

While cheaper coal is an option, gas-fired power generation is preferable as it will help the country to meet its carbon emissions commitments and enhance energy security.

Current options on the table are to either:

  1. Develop another gas field or
  2. Start importing LNG

Otavio Veras, Research Analyst for our APAC Gas & LNG team, thinks LNG imports will be necessary to fill the gap and expects LNG demand to increase from 2025.

What’s the size of the prize for LNG developers? And which developers are best placed to take advantage of the supply-demand gap as Malampaya declines?

 

Otavio Veras explains how the Philippines can fill its gas supply gap

Is another gas field feasible?

The Sampaguita field is one possibility. But it has been off-limits since 2014 when the DOE issued a moratorium on all exploration and drilling work amid maritime tensions with China.

It’s also possible that the life of the Malampaya field could be extended – if so, how will this influence LNG demand?

Commodity

Commodity Market Report

Philippines LNG long-term outlook 2019

Get the report
Gas processing facility

More details are available in our ‘Philippines LNG long-term outlook 2019’ report. Read it to understand:

  • Who’s who in the Philippines gas market
  • Commercial dynamics including contract and gas price structure
  • Which projects are most likely to go ahead, and by when
  • Key downside and upside risks to LNG demand

Related content