Prime Energy, SPPC Ink Malampaya Gas Deal for Ilijan Plant

Razon-led Prime Energy, the operator of Malampaya gas-to-power project, on Thursday said it signed an agreement to supply indigenous natural gas to South Premiere Power Corporation’s (SPPC) 1,200-megawatt Ilijan Power Plant in Batangas. In a news release, Prime Energy said the Interim Natural Gas Supply Arrangement with SPPC is “expected to reduce fuel costs by an average of P0.36 per kilowatt-hour and help lower electricity prices for consumers.” Under the deal, the company said Malampaya gas will be supplied to the Ilijan Power Plant from September 1, 2026 to February 25, 2027, which could help reduce fuel costs by replacing more expensive imported fuel with indigenous natural gas. Prime Energy, citing Meralco’s estimates, said a generation charge savings of approximately P0.36 per kilowatt-hour could be expected beginning September. "This demonstrates that indigenous Malampaya gas can help lower electricity costs for consumers while delivering reliable energy supply," said Donnabel Kuizon Cruz, president and CEO of Prime Energy. "Through this arrangement, the SC38 Consortium and SPPC are reducing fuel costs, maximizing the use of existing infrastructure, and strengthening the country's energy security. Every unit of indigenous gas that displaces imported fuel helps make electricity more affordable for Filipino households and businesses while reinforcing the country's energy independence,” said Cruz. As the country's pioneering indigenous natural gas project, Prime Energy said Malampaya continues to play a critical role in delivering affordable, reliable, and cleaner energy. The company said the supply to Ilijan reinforces the strategic importance of developing local energy resources that help cushion consumers from global fuel price volatility while supporting the country's growing electricity demand. Moreover, Prime Energy said under the fiscal terms of Service Contract No. 38, approximately 40% to 60% of every peso of Malampaya's net proceeds accrues to the Philippine government. Over the past two decades, the company said the Malampaya project has contributed more than $14 billion in revenues to the government. —RF, GMA News