The Philippines' first offshore natural gas pipeline project will start operation in October, Energy Secretary Vince Perez Jr., said yesterday, as he noted that by next year, the country will be exporting liquefied natural gas. The landmark $5 billion Malampaya Offshore Gas Field project is expected to reduce the country's dependence on imported fuel oil and is seen to save the country hundreds of millions of dollars every year.

Reporting on the status of the project to the President and the Cabinet at yesterday's Cabinet meeting, Energy Secretary Vince Perez, Jr. said the project's subsea facilities, which include a 504-km-long, 24-inch pipeline from Palawan to Batangas, have been completed in the first quarter of 2001.

The 504-km-long pipeline - which will carry natural gas pumped from the deepwater gas fields in Malampaya, an area located some 80 km off western Palawan island to a processing complex and power generating plant in Batangas province - is considered one of the largest natural gas projects in the world and the single largest investment of the United Kingdom in the Philippines.
The Philippines also plans to export natural gas to other countries.

Natural gas is regarded as a "cleaner" alternative to other fossil-based fuels since it has minimal polluting effect on the environment. According to Perez, the first gas sales from Malampaya will start on January 1, 2002. The deepwater gas-to-power project is expected to generate about 16 per cent of the total electricity supply in 2002, Perez added.

Perez noted that the use of natural gas for power generation will save the country an estimated $670.8 million a year. "The country's dependence on imported oil would be reduced, and this would mean considerable savings in dollars," Presidential Spokesman Rigoberto Tiglao said in a separate statement yesterday.

Tiglao added Malampaya was a "very big development" for the economy. "It will send a signal that we are reducing our oil dependence, that our economy is starting to improve," he explained.
The Malampaya gas field is located close to the Philippines border with Malaysia, a region which lately has become a haunting ground of sea pirates and kidnappers from the Moro separatist group, Abu Sayyaf, as well as intrusions by China.

China claims a nearby group of islands in the south China Sea, the Spratlys, which is also believed to be rich in mineral resources. To secure the gas fields, the energy department proposed to the President and the Cabinet the issuance of a proclamation order declaring the areas around the Malampaya complex an Exclusion Zone.

The proclamation will also declare as a safety zone the pipeline from the platform to Batangas.
Tiglao said the exclusion zone was needed because of concerns about the security of the facility, which sits in the middle of the sea. The zone will cover a one-kilometre radius around the Malampaya platform, in which no vessels would be allowed to sail. No aircraft will be allowed to fly below 500 metres of the safety zone.