Palawan to Receive Share of Malampaya Gas

The Palawan Government and the Philippine Department of Energy are on the verge of finalizing a MOA that would provide the province of Palawan with a share of the gas revenues from the Malampaya natural gas project. Under Palawan local law, the government takes a 40% share of the royalties. However, the Department of Energy only wants to grant a 20% royalty share. The final decision will hinge on legal issues and the proximity of Palawan to the natural gas project. The Malampaya gas development project, which represents the Philippines' single largest foreign investment, is about 80 km from the island of Palawan.

The government is expected to receive approximately $10 billion in royalties from the Malampaya development over the next twenty years.

The Palawan government has said it plans to spend its share of Malampaya royalties on developing its electricity system, and lowering electricity rates for consumers. The central government had earlier contemplated a bill delineating the exact boundaries of the Philippine archipelago, which placed the Malampaya gas field outside Palawan's jurisdiction. The bill was met with opposition from the Palawan government, and has not been passed. Malampaya's estimated gas reserves are 2.7 Tcf and 85 million barrels of condensate. Stakeholders in the gas project are Shell Exploration with 45%, ChevronTexaco with 45% and PNOC with the remaining 10%.