MALAMPAYA 
GAS, CONDENSATE AND OIL FIELD,
OFFSHORE PALAWAN ISLAND, PHILIPPINES

Operated by Shell Philippines Exploration B.V. ("SPEX")

Malampaya is a gas and condensate field located in over 800 metres of water depth to the northwest of the Palawan, which is one of the Philippine islands.   SPEX discovered it in 1992, and towards the end of 2001 brought it into production in an ambitious gas-to-power scheme, with gas piped subsea from the field to a power plant south of Manila on the island of Luzon (see schematic below).  This development is one of the largest industrial undertakings in the history of the Philippines. 

To learn more about this project, please visit www.malampaya.com

MESSAGE FROM TONY ALLWRIGHT, SPEX'S FIRST CEO,
ON THE OCCASION OF MALAMPAYA FIRST GAS
ON MONDAY 1ST OCTOBER 2001

 

 

 

 

 

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Ladies and Gentlemen,

I was the first of SPEX's three CEOs, and though I cannot be with you today, I would nonetheless like to applaud SPEX and all its contractors, on bringing to productive fruition Malampaya, on the occasion of First Gas.

How well I remember the birth of SPEX in early 1991 : there were just a dozen of us, half Filipinos seconded from Pilipinas Shell, half expatriates, all full of hopes and apprehension. With skill and enthusiasm, we started SPEX from zero and experienced many highs and lows. Standing out are state-of-the-art deepwater drilling, our 3D seismic survey and the shocking Mount Pinatubo eruption.

But it all culminated in June 1992 with our glorious discovery of Malampaya, which tested oil at 12,000 bbl/day and gas at 30 MMSCF/day. It was a special honour for me to present the first sample of Malampaya oil to then President Corazon Aquino at Malacañang Palace.

The following year, I was able with great pleasure and pride to hand over SPEX, by then a competent, professional entity with a resounding success under its belt, to Dré Boon to market and plan the development of Malampaya. This superbly achieved, Dré in turn handed over SPEX in 1998 to David Greer for the development phase, now so expertly completed and within time and budget.

I sincerely congratulate David Greer, Dré Boon and everyone in SPEX for all this stunning success.

I would also like to express my special admiration of two outstanding individuals who have provided unceasing support to SPEX since its birth in 1991, namely Boomie Bomasang, President of PNOC Exploration Corporation, and Louie Heussaff, President of Supply Oilfield Services. And of course Zeny Manlangit who has faithfully served with all three of SPEX's CEOs, and whom I had the privilege of recruiting on Day One.

My best wishes to everyone in SPEX, and may SPEX and Malampaya continue to serve the Philippine people well into the future.

 

Tony Allwright

SPEX's Founder-CEO
1991-1993
tony@tallrite.com

www.tallrite.com/malampaya.htm 

Click on thumbnails below and above to view enlarged images in a new window

On location at Malampay-1,
offshore Palawan Island, Philippines,
in May 1992

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Foramer’s DP Drillship Pelerin production-tests discovery well Malampaya-1, in 837 metres of water depth.  MV Smit Lloyd 73 keeps things cool

The Malampaya Discovery Team, June 1992

  Malampaya DiscoveryTeam, in our Manila office, 1992

Other images from SPEX's early days, before the discovery of Malampaya

Jan Zwart and Joan Horbeek on board Drillship Pelerin About to fly from Palawan "international airport" to Malampaya Drillship Pelerin, which made the discovery Ruby and friend, in the office, always smiling, 1992
Click here for Malampaya logo

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Location of Malampaya,
off Palawan Island
Malampaya development plan as at October 2001
Schematic of
SPEX's
Malampaya development,
October 2001

Malampaya Pipeline Route
to Luzon Island
Further details here.

 


PRESS RELEASE

ON THE OCCASION OF THE FORMAL INAUGURATION OF THE
MALAMPAYA DEEP WATER GAS TO POWER PROJECT

October 16th 2001

On October 16, 2001, Her Excellency President Gloria Macapagal-Arroyo of the Philippines formally inaugurated the country’s landmark Malampaya Deep Water Gas to Power Project at the Malampaya On-Shore Gas Plant inside the Shell Tabangao Refinery in Batangas City. The inauguration, held three and a half years after the project’s declaration of commerciality in May 1998, marks the birth of the Philippines’ natural gas industry.

The ceremony included the start-up of the Malampaya production platform by President Arroyo and operation of the 1,000-megawatt Sta. Rita power plant.   The first processed natural gas flowed from the on-shore gas plant to the Sta. Rita power plant via an on-shore pipeline on September 27th.

President Arroyo in a message said: "Malampaya marks the start of our independence from oil importation and is a paramount testament to what human harmony can achieve. The inauguration of Malampaya that was primarily designed to make the first delivery of natural gas to the new Sta. Rita and Ilijan power plants, signals the birth of the country’s natural gas industry".

The project represents a significant proportion of the Philippines’ energy requirements : some 25% needed for power generation and, of course, the corresponding reduction in reliance on imported energy supplies.

With investments totaling $4.5 billion for the upstream and downstream components, Malampaya comprises the largest, single foreign investment in the history of the Philippines. It is a national flagship project of the Philippine government under the Department of Energy. It is considered the most significant industrial infrastructure and first-of-its-kind development in the country. It will generate revenues for the national government of $8-10 billion over 20 years.

The project involves the extraction of natural gas from 3,000 meters below sea level in water depths of 820 meters. The gas is transported by two 30-kilometer flowlines to a shallow water production platform for separation of the condensate from the gas. The dry gas then flows for 504-kilometers by a subsea pipeline to an on-shore gas plant for final processing and delivery to three power stations with a total generating capacity of 2,700 megawatts.


LETTER FROM DAVID GREER, CURRENT CEO OF SPEX,
ON THE OCCASION OF MALAMPAYA FIRST GAS

October 1st 2001

SPEX's Finest Day

Dear  Friends and Colleagues

I would like to extend my heartiest personal congratulations and very warmest thanks to you all on the attainment today of this most important and very significant milestone - Availability of Malampaya Gas to Gas Buyers on October 1st 2001. I am extremely proud of each and every one of you and, in particular, of our proven collective ability to meet this contractual milestone safely, on time and within budget.

I am very well aware that you have offered much toil and sweat to help in the attainment of this milestone and have had to endure many, many long months of struggle and challenge. As I have said, many times before, nothing is achieved without passion. Throughout this period, you have demonstrated not only tremendous passion but a sustained capability to work professionally, safely, effectively and responsibly against very tight deadlines and to cope with many additional burdens. You have also shown the flexibility to cope with the unexpected and unprecedented.  For all of this effort and tolerance, I thank you sincerely.

To develop and form SPEX as we now know it from its rather immature state in early 1998 whilst simultaneously executing a deep water project of this scale and complexity, so rapidly, was a very serious undertaking. I hope you will never forget that we have just embarked upon one of the greatest industrial undertakings in the history of The Philippines. In the furtherance of this object of SPEX and national interest, you have all played a very, very important role. I am sure that the good work will go on and I remain confident in our collective ability to go on to meet the all-important date of first commercial Gas Sales on January 1st 2002.

As the very demanding and challenging Malampaya Project development phase draws to a close, the memories of the many successes achieved throughout this intense period of activity are still vivid.  The Malampaya Project rapidly advanced from a near standing start after the Declaration of Commerciality on 14th May 1998 to its current state of completion.  All hardware, infrastructure, staff resources and systems are now in place in readiness for power plant commissioning gas to flow throughout October and for sales gas to flow to customers on January 1st 2002.  In doing so, a large number of substantial gains have been achieved on the technical, operational, contracting, organisational, human resources and reputation-management fronts.  At the same time, the structures, procedures and shared staff values necessary to successfully complete a major deep water project safely, on time and within budget in an environment with very limited E&P history or infrastructure have also been implemented. Our principal project tenets of HSES, Cost, Schedule, Availability, Innovation and Sustainable Development have truly served us very well.

Throughout the project, we have seen the results of our efforts being transformed into great physical achievements.  How many of us will ever forget the tremendous sense of achievement we all shared when the CGS was successfully towed from Subic and installed in its final resting place offshore Palawan ? Or, when Ma-5 was tested and the drilling programme was successfully completed ? Or, when the laying of the gas export line was completed? Or, when we achieved 10 million man-hours without an LTI ? Or, when the CALM Buoy was launched ? Or when the Topsides was successfully towed from Singapore and installed offshore? Or when gas was taken aboard the platform for the first time on Tuesday 12 th September 2001 ? Or when gas finally arrived at the completed OGP on September 24th and was exported to First Gas on September 27th at 1555 hrs ? 

We have also had some testing moments as a team in resolving the many known and unexpected issues that arose during the past 3 ½  years. On reflection, I am confident that we have all of the skills and experience (as well as the odd battle scar!) that we will require to meet the challenges ahead of us. We have a strong team with shared values wherein individuals can see and realise the potential for personal development, with opportunities to participate in the development of our exciting and diverse team culture and to contribute to a well oiled and efficient SPEX organisation. 

For SPEX staff involved in project development activities, the Malampaya story is about to end. In reality, for the vast majority of SPEX staff and SPEX's customers however, the Malampaya story is just about to begin and a major organisational and mind-set transformation is about to occur within SPEX.   The looming challenge to operate and maintain all of the Malampaya facilities to meet the very demanding targets stipulated in the gas sales contracts, particularly against the low off-take scenarios now envisaged within the complex socio-political environment of the Philippines is unquestionably very formidable.  In striving to meet these targets, not only will the Company have to transform from a largely project development mentality to an operational mentality, but it will have to do so with a much reduced and different cadre of staff.  This staff reduction will occur following the planned exodus of many expatriate staff formerly engaged in the formation of the Company and development activities and will be accompanied by a new Management Structure and Management Team.   The emphasis now is on completing those remaining but essential safety critical commissioning activities that must be completed before gas can be exported to customers safely and reliably from January 1st 2002. The additional challenges of endeavouring to embed the systems required to operate and maintain the entire Malampaya Asset safely and reliably in the short term as well as pursue the enigmatic Malampaya Oil Rim extended well test and possible future development will be significant.  Pressures stemming from production availability and operating cost reduction targets schedule will also have great significance particularly in 2002.

Furthermore, the pressures to continue to preserve the integrity of the existing GSPA's against a less optimistic power demand forecast and power plant dispatch difficulties and to safeguard the project's viability and public reputation within an extremely complex social, political and pristine physical environment show no signs of abating.   Finally, continued
successful Reputation Management / Sustainable Development initiatives will remain to be critical elements of SPEX's work programme if the Company is to secure the long-term commercial success of the Malampaya Project and retain strong public and Government relations.

So as we look back over the last 3 ½  years,  we have laboured very hard with much time and energy spent on blitzes large and small.  Together, we have made remarkable progress, which could not have been achieved without your full support and commitment.   I am also very conscious that we could not have achieved our goals without the help and support of your partners and family who, like you, have had to sacrifice much of their personal time to achieve the goals that we have accomplished. I would like to extend a
special personal thank you to all of them. The whole was one great team.

I know that on this special occasion my expatriate colleagues would want me to pay a tribute of admiration, respect, and affection to their Filipino colleagues.  No petty differences in the world of trade, traditions, or national pride should ever blind us from our common identities embedded in our priceless SPEX Shared Values. If we all keep our eyes on these guideposts, then no difficulties along our path of mutual co-operation and
teamwork should ever be insurmountable.

I would like to take this opportunity to thank you for the honour of leading you as Project Director during the Malampaya Project Development Phase; the honour of having you as part of our world-class team pioneering the natural gas industry in the Philippines will remain one of the proudest in my memories. Like a ship that passes over the horizon, whilst it may no longer be visible, the efforts of all its crew will never be forgotten.

And so as this phase of the Malampaya story draws to an end, the personal efforts of everyone involved in this phase of the Project will never be forgotten in terms of the tremendous contribution they have made to the Malampaya story. By taking pride in all aspects of our work and continuing to work together as a united team, we should be proud of our collective ability to deliver this showcase and world class project for the benefit of
the Philippines and the Filipino people.   As you all know, Malampaya remains one of the few bright shining stars of hope for a better future for this country.  It is therefore incumbent upon all of us to continue to deliver on our promises.   Seventy five million people are depending on SPEX delivering a new industry and a new clean fuel to power future growth by January 1st 2002.  Let us not fail them.  

In closing, may the warmth of our Malampaya Flame bestow upon you health and fortitude to continue to work safely and diligently in the future with confidence and pride. I sincerely hope that you will be blessed with good health, happiness, peace and prosperity and that similar blessings will be bestowed upon all Malampaya stake-holders, friends and neighbours.

Thank you for your personal contribution towards this most outstanding achievement.

Mabuhay tayong lahat!

Onwards Ever; Backwards Never!

David J Greer
Managing Director
Shell Philippines Exploration B.V.


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