The Malampaya Deep Water Gas to Power Project (the Malampaya project) reached a major milestone when the Declaration of Commerciality for the project was signed in May 1998. In just less than 31/2 years, Shell Philippines Exploration B.V. (SPEX), as Operator, successfully completed this remote deep water gas project, and successfully accomplished two additional major milestones by landing gas for power plant commissioning to its downstream buyers by October 1st 2001 and commencing commercial sales deliveries shortly thereafter on January 1st 2002.

This paper describes the history behind this landmark undertaking, the trade-off between alternative deep water development solutions, the contracting strategies employed as well as the many venture management, technical, HSE, commercial and sustainable development challenges that were undertaken by SPEX to successfully transform this exciting deep water project from a vision into a reality.

The Malampaya project marks the dawn of the natural gas industry in the Philippines, illustrating the crucial importance of integrating the development of gas markets with the rapid construction and successful operation of the necessary deep water and onshore infrastructure. The Malampaya development comprises five novel subsea wells in 820 metres of water, producing via a subsea manifold and two 30 km long, 16 inch flowlines to a concrete gravity platform located in 43 metres water depth. These wet gas flowlines, with their large vertical displacements and mixture of gas and liquids have pushed deep water subsea gas development technology to higher levels. The platform production facilities were installed on a concrete gravity substructure that was built in Subic Bay, Philippines and completed some 3 months ahead of schedule. The topsides facilities were fabricated in Singapore and were towed over 2200 km to the Philippines on March 1st 2001. The gas and condensate is treated on the platform to export specification. Gas is compressed and transported via 504 km long 24 inch pipeline to an onshore gas plant at the site of the Shell Refinery at Tabangao (Batangas, Luzon Island). The condensate is stored in the platform concrete substructure caisson and exported approximately every two weeks via shuttle tankers. The Malampaya pipeline is a major engineering accomplishment in its own right, traversing rugged sea floor topography through seismically active and environmentally sensitive regions. An onshore gas treatment plant, built to remove the H2S content of the gas will serve as the delivery point to the buyers.

The project schedule to meet the 1st October 2001 first gas flow commitment to the gas buyers was very tight from the outset. The project goals were achieved by continued attention to the six project tenets of cost containment: schedule attainment, use of innovative technology, high system availability, exemplary Health, Safety, Environment and Security (HSES) management, and Sustainable Development.

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