Prime Energy, operator of Service Contract No. 38, has signed an Interim Natural Gas Supply Arrangement with South Premiere Power Corp. (SPPC) to supply indigenous Malampaya gas to the 1,200-megawatt Ilijan Power Plant in Batangas, a move expected to reduce fuel costs by an average of Php0.36 per kilowatt-hour and help lower electricity prices for consumers.
Under the deal, Malampaya gas will be supplied to the Ilijan Power Plant from September 1, 2026 to February 25, 2027, helping reduce fuel costs by replacing more expensive imported fuel with indigenous natural gas.
The cost-saving impact will soon be reflected in electricity prices. Meralco recently announced a generation charge savings/reduction of approximately Php0.36 per kilowatt-hour beginning September 1, highlighting the immediate benefit of indigenous Malampaya gas in helping moderate power costs for Filipino consumers.
The arrangement broadens the utilization of Malampaya gas across the Luzon power sector. By supplying one of the country’s largest power generation facilities, it supports reliable electricity generation, provides fuel supply flexibility during the contract period, and contributes to a more resilient and diversified energy mix.
“This demonstrates that indigenous Malampaya gas can help lower electricity costs for consumers while delivering reliable energy supply,” said Donnabel Kuizon Cruz, President and CEO of Prime Energy. “Through this arrangement, the SC38 Consortium and SPPC are reducing fuel costs, maximizing the use of existing infrastructure, and strengthening the country’s energy security. Every unit of indigenous gas that displaces imported fuel helps make electricity more affordable for Filipino households and businesses while reinforcing the country’s energy independence.”
As the country’s pioneering indigenous natural gas project, Malampaya continues to play a critical role in delivering affordable, reliable, and cleaner energy. The supply to Ilijan reinforces the strategic importance of developing local energy resources that help cushion consumers from global fuel price volatility while supporting the country’s growing electricity demand.
Beyond lowering electricity costs for consumers, Malampaya also generates significant fiscal benefits for the country. Under the fiscal terms of Service Contract No. 38, approximately 40-60% of every peso of Malampaya’s net proceeds accrues to the Philippine government. Over the past two decades, the Malampaya Project has contributed more than US$14 billion in revenues.
