Our Malampaya deep-water gas-to-power project off the coast of Palawan began operating with a first offshore platform in 2001. A second platform started up in 2015 – the first to be designed and built in the country – to help maintain vital supplies of energy for years to come.
Malampaya Phases 2 & 3
The Malampaya deep-water gas-to-power project signalled the birth of the natural gas industry in the Philippines. It delivers up to 20% of the country’s electricity requirements using indigenous resources of natural gas, the cleanest-burning hydrocarbon, and reduces the need for imported oil. Phases 2 and 3 are expected to sustain levels of gas production in the coming years, helping to maintain national energy security.
Location: Offshore Palawan, Philippines
Depth: Wells are in 820 metres (2,690 feet) of water depth and the reservoir is 2,990 metres below sea level
Interests: Shell Philippines Exploration B.V. 45% (Shell-operated), Chevron 45%, Philippine National Oil Corporation-Exploration Corporation (government) 10%
Key contractors: Malampaya is a joint undertaking of the Philippine national government and the private sector. The project is spearheaded by the Philippine Department of Energy (DOE) and developed and operated by Shell Philippines Exploration B.V. (SPEX) on behalf of joint venture partners Chevron Malampaya LLC and the Philippine National Oil Corporation-Exploration Corporation
Fields: Camago Malampaya gas reservoir
Production (100%): ~ 380 mmscf/d natural gas production; ~ 15 kb per day condensate
Since 2001, the Malampaya project has been producing cleaner-burning natural gas for three power plants at Batangas, on the country’s largest and most populous island of Luzon. The power plants have a combined generating capacity of 2,700 megawatts – enough to meet up to 30% of Luzon’s electricity needs, or about 20% of the country’s total electricity requirements.
The project has completed its next stages of development, Malampaya Phases 2 and 3, which aim to maintain a steady supply of natural gas to provide power for Luzon.
Shell successfully completed Malampaya Phase 2 in 2013, which added two new production wells. Malampaya Phase 3 saw the design, fabrication and installation of a new depletion compression platform to maintain levels of gas production, which began operating in October 2015. This was the first oil and gas platform to be designed and built in the Philippines, and its successful completion has made the country a player in construction for the oil and gas industry.
The project extracts natural gas and condensate from the depths of the Palawan Basin. A nearby shallow-water production platform processes the gas and exports it through a 504-km (313-mile) underwater pipeline to a gas plant on shore. This processes the gas further and sends it to three power plants in Batangas.
In February 2015, Shell towed the Malampaya Phase 3 depletion compression platform from its construction yard out into the West Philippine Sea, where self-installation technology lowered its 80-metre legs, positioning it next to the existing platform. Self-installation takes away the need for large vessels specialising in offshore platform installation. Most importantly, its use on Malampaya Phase 3 minimised interruption to gas production.
Both platforms are designed to withstand typhoons and earthquakes, a challenge unique to this region.
Environment and society
The flow of indigenous natural gas from the West Philippine Sea is helping to fuel the Philippines’ economic growth and progress. Shell supports health improvement, livelihood generation programmes and environmental conservation efforts through its partner foundations in Palawan, Oriental Mindoro and Batangas.
In 2002, the United Nations Environmental Programme and the International Chamber of Commerce selected the Malampaya project for the World Summit Business Award for Sustainable Development in Partnerships. The project was rewarded for achieving a careful balance of social, environmental and economic components during its development.
Pilipinas Shell Foundation, the social arm of Shell in the Philippines works with the province of Palawan to implement a USAID programme called Movement Against Malaria in more than 300 villages on Palawan island. The programme has set up centres in each village to provide early diagnosis and prompt treatment of malaria.
Beyond providing power for large cities and industries, the Malampaya project aims to bring sustainable and affordable energy to communities least likely to be connected to the grid. Pilipinas Shell Foundation has also put in place a micro-grid using hydropower and solar energy to power the village of Kalakwasan on Palawan island. The village is home to the Batak indigenous people. Today all homes in Kalakuasan are powered by the mini-grid and tribesmen are trained to operate and maintain the system.
Malampaya is located in one of the most biologically diverse areas of the world, known as the Coral Triangle. Its waters are important for biodiversity and vital for the livelihoods of many local villages which depend on them for fishing. But the species-rich waters and corals are under threat from natural phenomena such as storms, illegal fishing and over-fishing. The Malampaya Foundation, the project’s social arm set up by the joint venture partners, is working with communities to help manage and restore their local marine resources and enhance livelihoods.
The Malampaya project also implements strategic social investment programmes at Subic, on Luzon island, through the Malampaya Foundation. These include livelihood training, and education on road safety and disaster response. The programmes are helping to improve the lives of hundreds of Filipinos long after completion of the project’s third phase.
Building local skills and expertise
Malampaya Phase 3 included the first offshore platform to be designed and built completely in the Philippines, and brought new technical expertise into the country. We are helping to raise project expertise to world-class levels in the long term, enabling the Philippines to compete for future oil and gas projects regionally and globally.
The third project phase has provided more than 1,200 new jobs for Filipinos, generated business for local companies, and is improving the skills of local workers in the long term. More than 90% of those operating the platform are Filipinos.
Poor and unemployed young adults from local communities can gain skills for jobs in areas such as welding, pipe-fitting, and construction as part of a vocational training programme run by the Malampaya Foundation. The programme, called Bridging Employment through Skills Training (BEST), links trainees with industries in need of skilled workers. Since 2007, more than 4,000 young adults have graduated, 80% of whom have found work in the Philippines or abroad.
Safety training is mandatory before anybody is allowed to work on the Malampaya project. In 2013, the Malampaya Health, Safety and Environment (HSE) Training Centre opened. It has trained more than 6,000 Filipinos to world-class HSE standards.
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