Malampaya fuels the Philippines

Audrey Raj

November 1, 2015

Audrey Raj explains how an old deepwater field such as Malampaya continues to power the Philippines and benefit its economy.

In early 2015, the Malampaya Phase 3 depletion compression platform was towed from its fabrication site in Subic Bay, Philippines. Photos from Shell.

The Malampaya natural gas field continues to power a third of homes and businesses in the Philippines, thanks to its new offshore structure, the depletion compression platform (DCP), which recently came online in early October after its installation was completed in September. Located adjacent to the existing Malampaya shallow water platform 50km from Palawan in western Philippines, the DCP is the first offshore platform to be designed and built in the country.

Spearheaded by the Department of Energy (DOE), the Malampaya deepwater gas-to-power project is a joint undertaking of the Filipino national government and its private sector.

Shell Philippines Exploration operates Malampaya under service contract 38 (SC38) with 45% interest. Its joint venture partners are Chevron Malampaya (45%) and the Philippine National Oil Co. Exploration Corp. (PNOC-EC) (10%). Since it began operations in 2001, the Malampaya offshore gas field has become one of the main sources of energy for the Philippines.

It has produced cleaner burning natural gas for three power plants in Batangas, which have a combined generating capacity of 2700 MW.

However, pressure in the gas reservoir deep beneath the seabed dropped over time, potentially reducing the supply of electricity to millions of people.

To address the problem, Shell designed the DCP, which will boost the pressure to help keep gas flowing out of the reservoir at current levels for about another decade.

Malampaya overview

The depletion compression platform was installed alongside the existing Malampaya platform in the West Philippine Sea.

Discovered in 1992, the Malampaya story spans over a decade when Shell first discovered a natural gas reserve in the Camago-Malampaya reservoir.

Following the spudding of five wells, some 2.7 Tcf of natural gas and 85 MMbbl of condensate located in approximately 3000m below sea level were identified.

After comprehensive studies in 1995 showed that the area presented an opportunity for commercial gas development, in 2001 the Malampaya deepwater gas-to-power was inaugurated.

Along with the original field development of 1998, additional two stages – Malampaya Phase 2 (MP2) and Malampaya Phase 3 (MP3) – were formulated to sustain gas production to power Luzon, the most populous Filipino island.

While MP2 saw the drilling of two new wells in 2013, MP3 was the design, fabrication and installation of the second Malampaya offshore platform, the DCP.

Malampaya currently produces 380 MMscf/d of natural gas and 15,000 b/d of condensate. The natural gas extracted from these wells is transported through flowlines to an offshore shallow water production platform for initial processing. 

Condensate is stored at the base of the platform, while the dried gas is transported via a 504km underwater pipeline to the onshore processing gas plant in Batangas.

Two onshore pipelines transport the fuel to three gas fired power stations, namely, Santa Rita (1000 MW), San Lorenzo (500 MW) and Ilijan (1200 MW).

Economic benefits

Historically, the Philippines has been an economy that relies heavily on imported fossil fuel, and the Malampaya deepwater gas-to-power project has helped to reduce that dependency by 30%.

While Malampaya has signaled the birth of a natural gas industry for the Filipinos, it has also been instrument in contributing billions of pesos in government revenue share and significant local employment opportunities.

For example, in 2013 alone the DOE together with the Malampaya joint venture partners turned over a total of US$1.1 billion dollars’ worth of revenues to the national government.

Since, the Philippines is not as mature as its Southeast Asian neighbors, such as Indonesia and Malaysia, the country’s oil and gas professionals lack local employment opportunities, too.

In addition to providing some 1200 local jobs, the construction of DCP has also generated more businesses for homegrown companies supporting the project.

Workers tapped for the construction have attended mandatory training to elevate their competencies as well.

So far, the Malampaya Health Safety and Environment Training Center has upgraded the skills and technical knowledge of more than 6000 Filipino workers to international standards recognized by the Offshore Petroleum Industry Training Organization.

The country now has a competitive edge in pitching for future oil and gas projects, as this latest installation phase of the DCP demonstrates technical capability of the Filipino workforce.

Furthermore, to inspire the youth into oil and gas engineering, in 2014, Shell opened the fabrication yard at the Keppel Subic shipyard where DCP was being constructed to would-be engineers.

About 30 engineering students from Ateneo De Manila University, De La Salle University, University of the Philippines–Diliman and University of Santo Toma witnessed the DCP slowly coming to completion.

Self-installing DCP

A team of more than 1400 Filipino workers took about two years to build the DCP, which was constructed at the Keppel Shipyard in Subic, Zambales, within 11.8 million safe man-hours.

Keppel was responsible for the fabrication of the entire DCP, including the integration of the topside modules and the fabrication of the link bridge connecting the DCP to the shallow water platform.

Fluor Philippines, which was involved in MP3’s front-end engineering design (FEED), also provided engineering, procurement and construction (EPC) support services.

Engineering and consulting firm, Arup, was appointed by Fluor as a subcontractor to complete the substructure detailed design and provide procurement support on substructure related matters.

Following the completion of the engineering design in early 2014, Shell appointed Arup to provide engineering support services for the fabrication and installation of the 13,000-ton self-installing substructure.

For Shell, the self-installing technology of the platform was a first of its kind, as it enabled the platform to be installed without the need for large specialized installation vessels.

The platform was built to float and was towed from Subic to the Malampaya location, offshore Palawan. The inbuilt jacking system enabled the 80m legs to be jacked down and lifted the platform from the water into its final position.

According to Arup, the complex soil conditions at the installation location required a novel seabed removal and rock replacement solution to ensure stability of the gravity based foundations.

The DCP was installed within the installation tolerance of 1m from the set out point ensuring the interconnecting bridges to the existing platform could be installed without any modification.

As the Malampaya field is located in an earthquake and typhoon prone region, the DCP and the bridge were constructed to withstand strong tremors as well.