Luzon grid placed on alert as gas reserves drop

malampaya-fund-scam-probeThe Malampaya deepwater gas-to-power project in offshore Palawan Image from Shell Philippines

MANILA, Philippines –  The Luzon Grid was placed on yellow alert yesterday due to the limited gas restriction from the Malampaya deepwater gas-to-power project in offshore Palawan.

Data from the National Grid Corp. of the Philippines (NGCP) showed the grid’s reserves fell to 355 megawatts.

The Luzon grid’s capacity stood at 9,048 MW while system demand stood at 8,693 MW, resulting in reserves of 355 MW.

A yellow alert means reserves are below the minimum level set by the regulator, which for Luzon grid is pegged at 647 MW or the size of its Sual power plant in Pangasinan. A red alert means there is severe power deficiency.

According to Lopez-owned power generator First Gas, Shell Philippines Exploration B.V. – the upstream oil company of Shell and operator of the Malampaya gas field – imposed a natural gas restriction due to undisclosed technical problem effective 11 a.m. yesterday.

This limited the Sta. Rita and San Lorenzo combined natural gas allocation to about 403 MW. Sta. Rita modules 10 and 30 and San Lorenzo modules 50 and 60 will subsequently change over from natural gas to liquid fuel, First Gas said in a report to power distributor Manila Electric Co. (Meralco).

The Malampaya facility supplies power to three power plants in Luzon, accounting for 40 percent of the region’s power requirements. These are the Lopez-owned First Gas’ 1,000-MW Sta. Rita and 500-MW San Lorenzo plants in Batangas and Kepco Philippines’ 1,200-MW Ilijan plant also in Batangas.

Last month, the platform imposed limited gas supply, which Energy Secretary Carlos Jericho Petilla said may have been due to fine tunings following Malampaya’s one-month shutdown from March to April.

Meralco said it would make adjustments in its bill if there is any excess in under recoveries or adjustments in distribution and other charges that Meralco is entitled to given inflation and other factors.

“As alleged by Meralco, it may exceed its collections for its under recoveries for the second regulatory period if it continues with the implementation of its current rates. Hence, it seeks to implement interim distribution rates, which are about 10 percent lower than existing,” Energy Regulatory Commission (ERC) executive director Francis Saturnino Juan said.

Meralco spokesman Joe Zaldariaga said the firm would make the necessary adjustments once it receives approval from the ERC.

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