Philippines discovers ‘significant’ natural gas reserve at Malampaya East-1

By Chloe Mari A. Hufana and  Sheldeen Joy Talavera, Reporters

THE PHILIPPINES has made its first major natural gas discovery in more than a decade, a development that could strengthen domestic energy supply and support rising power demand, President Ferdinand R. Marcos, Jr. said on Monday.

The reservoir, called Malampaya East-1, lies about 5 kilometers east of the existing Malampaya gas field off Palawan province.

“This additional resource can help support the government’s efforts for the stabilization of our power supply,” Mr. Marcos said in a video posted on his Facebook page.

In a statement on Monday, Razon-led Prime Energy Resources Development B.V., the operator of the Malampaya deep water gas-to-power project, said that the newly discovered reservoir is estimated to hold an estimated 98 cubic feet of gas in place.

The discovery is equivalent to roughly 14 billion kilowatt-hours of electricity a year, enough to supply about 5.7 million households, 9,500 buildings or about 200,000 schools annually.

Initial tests showed the well flowing at about 60 million cubic feet of gas per day, a level Mr. Marcos said is comparable to the original Malampaya wells and indicates strong productivity.

The find also includes condensate, a high-value liquid fuel that could further support efforts to stabilize the electricity supply, Mr. Marcos said.

The Philippines relies on imported gas and coal to fuel its power plants and industrial base, leaving the economy exposed to volatile global prices and supply disruptions.

The discovery of new reserves at Malampaya East‑1 offers a rare reprieve, potentially reshaping the country’s energy outlook. It is expected to extend Malampaya’s role in the nation’s energy mix and reinforce domestic gas supply in the coming years. It is also expected to help the Philippines reduce its dependence on coal.

Mr. Marcos said the drilling was led by Filipino engineers and completed without accidents or environmental incidents, underscoring what he described as responsible resource development.

Malampaya East-1 is the first completed well under the Malampaya Phase 4 Drilling Campaign, which also includes the Camago-2 and Bagong Pag-asa wells.

The next steps involve the completion and testing of Camago-3, followed by the drilling of the Pag-asa exploration well to pursue additional gas resources.

In 2023, the Malampaya consortium — composed of Prime Energy, UC38 LLC, Prime Oil & Gas, Inc., and state-owned PNOC Exploration Corp. — secured a 15-year renewal of Service Contract No. 38 from the government, paving the way for the exploration and development of additional gas reserves until 2039. Drilling wells at the Malampaya gas field began last year.

“When we assumed operatorship, we committed to the President and the nation to breathe new life into Malampaya and revitalize the indigenous natural gas sector. Today, we are delivering on that commitment,” Prime Energy said.

Malampaya Phase 4 has been certified as an “energy project of national significance” by the Department of Energy (DoE), making it eligible for expedited permit processing perks.

“Natural gas is a critical bridge in our energy mix, supporting power reliability while we scale renewables, energy storage, and grid upgrades,” Energy Secretary Sharon S. Garin said.

“We will pursue this opportunity with discipline: maximizing value for Filipinos, upholding environmental stewardship, and ensuring that every milestone strengthens our national interest,” she added.

The DoE said it will continue to work closely with the consortium and relevant agencies in moving forward to the next steps — from technical evaluation, development planning, and all required regulatory and environmental safeguards.

GOOD NEWS
The gas discovery is “definitely good news for the Philippines,” according to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

He said the additional reserves will help boost local supply and reduce reliance on fuel and coal imports, which in turn could lower electricity prices and ease inflationary pressures.

“[This will] help fundamentally increase local supplies and reduce prices… [as well as] help reduce overall local electricity prices and slower inflation,” Mr. Ricafort said via Facebook Messenger, adding that natural gas is a relatively cleaner energy source compared with coal.

Edgar Benedict C. Cutiongco, president of the Philippine Petroleum Association, said that the confirmation of the natural gas discovery at Malampaya East‑1, reaffirms the country’s geological potential and the continuing strategic value of upstream oil and gas development.

“Indigenous gas reduces import dependence, stabilizes baseload power, and shields consumers from global price volatility. The discovery strengthens long‑term supply planning and supports a balanced energy transition,” Mr. Cutiongco told BusinessWorld.

He said that the significant findings signal “regulatory continuity, geological prospectivity, and infrastructure longevity,” which are key factors to attract capital into the Philippines.

“The Malampaya East discovery is a strategic milestone that advances national energy security, revitalizes upstream activity, and reinforces the Philippines as an investable energy market,” he said.

University of Asia and the Pacific Associate Professor George N. Manzano said having a domestic source of gas for power plants would make the Philippines less vulnerable to swings in imported fuel and movements in exchange rates.

“It can also serve as a buffer when global energy supplies are disrupted — for example, during geopolitical conflicts or other shocks,” he said via Viber.

Mr. Manzano noted, however, that the transition from discovery to commercial operations will take time, and the extent of consumer relief will depend on whether cost savings are passed on to consumers through lower electricity prices.

Juan Paolo E. Colet, managing director at China Bank Capital Corp., said the additional supply coming from the new gas reservoir should help make local gas-fired power plants more cost-efficient and competitive, which in turn could translate to cheaper and more reliable electricity.

“The latest discovery may encourage investor interest in other potential areas of natural gas deposits in the Philippines,” he said in a Viber message. “There are major domestic banks who are ready to support the sector.”

Peter Louise D. Garnace, an equity research analyst at Unicapital Securities, Inc., said that the major gas discovery is “a much-needed bridge fuel” as the country transitions to cleaner energy.

“With this ‘proof of life,’ we anticipate this success to ignite a new wave of exploration, boosting interest in the Department of Energy’s newly awarded service contracts as investors look to replicate this win,” he said via Viber.