State firms Philippine National Oil Co. (PNOC) and Power Sector Assets and Liabilities Management Corp. (PSALM) signed a memorandum of understanding (MOU) for the possible sale of “banked gas” from the Malampaya gas field.
PNOC posted on its website Tuesday that aside from the MOU, both firms also signed a non-disclosure agreement (NDA) pertaining to the possible deal.
“PNOC President Reuben Lista and PSALM President Irene Joy Garcia signed a MOU and NDA on June 7, 2021 for the possible sale and purchase of the PNOC Banked Gas.”
No other details were provided.
When sought to elaborate if PSALM is indeed buying the banked gas of PNOC, Lista answered in the affirmative but did not provide details.
“Kung ano ang bili nila sa SC [Service Contract] 38 ang initial na pinag-uusapan [initial discussions focused largely on the cost of SC 38],” said Lista when asked about the value of the banked gas.
The PNOC board earlier authorized the PNOC management to enter into comprehensive discussions or negotiations below the $6.616 per petajoules (Pj) under the Ilijan gas-fired power plant’s gas and sale purchase agreement (GSPA).
Iljan power plant, one of the gas plants fueled by the Malampaya gas facility, has a contract with the Malampaya consortium that will expire in 2022.
PNOC-Exploration Corp. (PNOC-EC), which is part of the Malampaya consortium, bought 108.6 Pj in 2009 valued at P14.4 billion. Of which, 4.61 Pj was sold to PSALM in 2013 for P937 million.
PNOC also sold 6.324 Pj to Shell in 2015 for P2.5 billion.
Based on PNOC’s 2019 computation, the value of banked gas has reached $10.50 per petajoules (Pj) but since the firm was given the go-ahead to negotiate the price, Lista said then that PNOC was selling it “at $9.70 something.”
Back then, the total remaining banked gas was previously recorded at 97.67 (Pj) valued at $700 million to $750 million.
First Gen Corp. was among those interested to buy PNOC’s banked gas.
Davao City-based businessman Dennis Uy was reportedly also interested but Phoenix Petroleum, one of the companies controlled by Uy, denied this, saying it has no knowledge of any interest to purchase banked gases.
Earlier, Phoenix Petroleum and China National Offshore Oil Corp. (CNOOC) signed a memorandum of understanding with PNOC.
The MOU allows the 3 companies to explore and discuss business opportunities and cooperation in relation to the equity investment in Tanglawan Philippine LNG Inc. and other companies relating to the project, PNOC facilities, market development, PNOC banked gas, and future energy projects.
Tanglawan used to be the planned joint venture between Phoenix Petroleum and CNOOC Gas and Power Group Co. Ltd., China’s largest LNG importer and terminal operator.
The joint venture did not take off as Uy’s Udenna Corp. purchased instead the Malampaya stakes of Chevron and Shell Philippines Exploration.