Prime Energy starts gas at Malampaya Phase 4 with two wells

By Olivia Hart

Prime Energy has started gas production from two deepwater wells at Malampaya Phase 4, linking Malampaya East-1 and Camago-3 to the existing production system offshore the Philippines.

Initial well tests reported by Prime Energy suggest the nearly $1bn expansion could extend the Malampaya field’s life by about six years. That estimate depends on future gas use. Prime Energy said integration and ramp-up (the gradual increase in well output) will continue over the coming months. Sustainable production levels have not yet been established.

First gas confirms startup, but it does not establish the wells’ steady output. Their contribution to the field remains subject to the coming ramp-up.

What did Phase 4 put online?

Prime Energy said Malampaya East-1 and Camago-3 were connected to the field through new subsea infrastructure (equipment and connections on the seabed). The project covered drilling the two deepwater wells, installing that infrastructure and joining both wells to the existing production system.

Prime Energy, Philippine President Ferdinand Marcos Jr., Department of Energy officials and SC 38 joint venture partners marked the first flow at the Malampaya Onshore Gas Plant in Batangas City.

Malampaya gas already supplies power plants in Batangas serving the Luzon grid. Prime Energy expects the new wells to help sustain the domestic fuel supply for power generation, although sustainable production levels remain unestablished.

Takeaway: Phase 4 adds producing wells to an established supply chain rather than a separate gas development.

What do the resource estimates show?\n

Prime Energy cites operator estimates for Malampaya Phase 4:

• Recoverable gas: 222 billion cubic feet (bcf).
• Potential electricity generation: 31.46 billion kilowatt-hours (kWh).
• Household equivalent: About 13.11 million households supplied for one year.

The 222 bcf figure represents recoverable resource rather than a stated production rate, and Prime Energy has not established how much gas each well can sustain after ramp-up.

The roughly six-year extension to field life is also conditional on future gas use. The initial results remain preliminary because both wells are still being integrated and brought up.

Takeaway: The 222 bcf estimate defines resource potential, while the wells still need to demonstrate steady output.

How did the drilling program finish?\n

Malampaya Phase 4 took 27 months from the final investment decision (FID, the formal approval to proceed) and finished five months ahead of the project schedule.

The work was the Philippines’ first offshore drilling campaign in more than a decade.

Prime Energy said the supply chain spanned 17 countries, while Philippine-based companies contributed fabrication and manufacturing work.

Takeaway: The program finished early and drew on international sourcing, with Philippine companies supplying fabrication and manufacturing.

Why does the consortium call Phase 4 necessary?\n

Prime Infra chairman Enrique Razon Jr. said: “For 25 years, Malampaya has demonstrated the value of developing our own energy resources. It has powered millions of Filipino households and businesses, supported economic growth, and generated more than $14bn in government revenues.”

He added: “But Malampaya’s resources are finite. Sustaining production requires continued investment and the technical expertise to develop reserves that are increasingly challenging to access. That is what Malampaya Phase 4 represents.”

Razon’s statement ties continued investment to finite resources, increasingly difficult access and the need to maintain output from an established Philippine offshore gas field operating since 2001.

The SC 38 consortium reports that Malampaya has generated more than $14bn in Philippine government revenue since operations began in 2001.

Takeaway: Phase 4 is intended to extend the operating life of a mature field through continued drilling.

What remains to watch?

Prime Energy signed an agreement in May 2023 to supply Malampaya condensate (a liquid hydrocarbon produced with gas) to Abu Dhabi National Oil Company Global Trading (AGT).

The agreement covers condensate sales from the field and sits alongside the Phase 4 drilling and subsea program.

The immediate watch item is the coming-months ramp-up. The key measures are sustainable flow from each well, the resulting contribution to Batangas power plants serving Luzon, and whether actual output supports the preliminary six-year extension estimate.

Until those measurements are available, 222 bcf should remain an operator estimate rather than a near-term supply forecast for the domestic gas supply system.

Takeaway: First gas is confirmed; sustained production from both wells is the key watch item.