Banked gas is the accumulated unused gas of the lIijan Power Plant, amounting to 108.6 Petajoules, as a result of the underutilization of the plant’s Take-or-Pay quantity (TOPQ) within the period 2002 to 2007. Under TOP, a fixed quantity of gas is being paid for by the power plant every year, whether they use the gas or not. The banked gas was originally paid for by the Government of the Philippines (GOP), through the Net Government Share, in assistance to the National Power Corporation, then owner of the llijan Power Plant, to satisfy the plant’s TOPQ provisions of their Gas Sale and Purchase Agreement (GSPA) with the Service Contract Number 38 (SC38) Consortium. In September 2009, PNOC purchased from the DOE all the rights, benefits and entitlements of the banked gas.
The Power Sector Assets and liabilities Management Corporation (PSALM) withdrew 4.61 PJ in 2013 for the Ilijan power plant and another portion, equivalent to 2.71 PJ, was offtaken by Pilipinas Shell Petroleum Corporation (PSPC) from June 2018 to January 2021 for its Tabangao Refinery.
Two (2) new GSPAs were executed in December 2021. The remaining volume of banked gas is equivalent to 101.28 PJ prior to consummation of such sale. On PNOC’s existing GSPAs signed in December 2021, the company continues to fulfill its obligation to deliver the contracted banked gas to the gas buyers.
Moreover, PMD received and evaluated new unsolicited offer for the purchase of PNOC’s uncontracted banked gas from an interested buyer. The key terms for the proposed purchase was presented to and approved by the PNOC Board on 31 May 2022, which served as basis for the preparation and finalization of a GSPA between PNOC and aforesaid buyer. The GSPA was finalized and approved in June 2022.
Link to the project document: Monetization of PNOC Banked Gas.pdf