Forum Energy plans to start natural gas project by year-end
Sunday, 09 August 2009 19:01
THE country may end the year or start next year with an additional supply of locally produced natural gas.
This is what Forum Energy Philippines president Jose Raymund Apostol told reporters on Friday, as he revealed company plans to start the production of natural gas from its Libertad gas field in Cebu the soonest possible time.
Forum Exploration Inc., a wholly owned unit of Forum Energy, holds 66.66 percent of the Libertad project. Another unit, Forum Pacific Inc., owns the remaining 33.33 percent.
Apostol said preparations are under way to extract and produce gas hopefully by the end of the year or early next year.
Under Service Contract 40, Forum Energy explored and developed the Libertad field situated in northern Cebu. The gas field was discovered in the late 1950s but was never developed.
From 1993 to 1995, a testing program was carried out that involved the drilling of seven wells. During the testing program, one of the wells proved positive results for gas availability.
In 2004, Forum Energy conducted a feasibility study to determine the most commercially viable option for the development of the field, which recommended a development plan using three gas-to-electricity generators with a maximum capacity of 3 megawatts (MW). The 3-MW facility was proposed by Desco, a leading provider of petroleum and geothermal products and services in the Philippines.
In February, Forum Energy signed a gas sale and purchase agreement with Desco for the development of the Libertad gas field for power generation. The deal calls for Desco to install within the year a 1-MW to 1.5-MW power generating unit in Bogo, northern Cebu, using GE Jenbacher gas engines.
For its part, Forum Energy is obliged to sell the gas to Desco at an agreed rate of $1.50 per million British Thermal Units (BTU) for the first 0.70 billion cubic feet (BCF) of gas extracted and utilized, and $1.60 per million BTU for any gas produced beyond 0.70 BCF.
Apostol said Desco will bring in power generating units that will be fueled by the gas coming out of the Libertad field.
He added that the development of the field involves Desco, Forum Energy and the Department of Energy (DOE).
Apostol also noted that negotiations are ongoing for a supply agreement between Cebu Electric Cooperative Inc. and Desco for this purpose.
DOE Undersecretary Ramon Oca confirmed that Forum Energy is in talks with the energy department for the construction of the gas plant. “It [the gas plant] will help ease [energy demand] in Cebu,” said the energy official, adding that the plant is designed to a modular type on-site. Paul Isla
