| Author | Todoc, Monaliza J. |
| Call Number | AIT Thesis no.ET-97-37 |
| Subject(s) | Natural gas--Philippines--Prices
|
| Note | A thesis submitted in partial fulfillment of the requirements for the degree of Master of
Science |
| Publisher | Asian Institute of Technology |
| Abstract | The discovery of natural gas in Camago/Malampaya, Palawan, in the Philippines has
provided a big boost to the energy self-sufficiency targets of the country. However, as a new
industry, natural gas development must confront a number of issues. Topping the list is the
agreed price between the producer and buyer of natural gas. In fact, negotiations have dragged
for three years ago, and the result is still in the process of being finalized.
This study have tried to calculate the natural gas price at the point of sale of the
Camago/Malampaya using the netback methodology. Considering all the limitations of the
cost data, the study have also attempted to estimate the cost-based price of natural gas. This is
to determine the gas price ranges: the netback as the upper limit price and the cost-based as
the lower limit price.
To calculate the netback value in power generation, two prototype power systems were
optimized: one including gas and another without given quantities of gas. The WASP model
was used to generate the least cost expansion plans, which were compared to determine the
netback value of gas in power generation.
The marginal cost of gas, on the other hand, was estimated using the average
incremental cost approach. Moreover, the depletion premium, which represents the
opportunity cost of using gas now rather than in the future, was calculated and then added. to
the marginal cost of gas to obtain the cost-based price of natural gas.
The result of the netback valuation and the cost-based estimation showed that at 12
percent discount rate, the prices of gas are $4.64/MMBTU and $3.93/MMBTU, respectively.
The sensitivity analysis using a 10 percent discount rate resulted in a lower gas prices for both
of the approaches mentioned. Comparing these with the actual initially agreed prices shows
that the latter are within the range of the former, indicating the reliability of the methodologies
in calculating the price of natural gas. The results of the study also confirms the sensitivity of
natural gas prices to the discount rate. |
| Year | 1997 |
| Type | Thesis |
| School | School of Environment, Resources, and Development (SERD) |
| Department | Department of Energy and Climate Change (Former title: Department of Energy, Environment, and Climate Change (DEECC)) |
| Academic Program/FoS | Energy Technology (ET) |
| Chairperson(s) | Pacudan, Romeo B. |
| Examination Committee(s) | Lefevre, Thierry;Malik, Arif Saeed;Giap, Van Dang |
| Scholarship Donor(s) | Government of France; |
| Degree | Thesis (M.Sc.) - Asian Institute of Technology, 1997 |