Power
Gas demand remains resilient amid shifting power mixes
Prime Midstream highlights the continued necessity of gas-fired power and liquefied natural gas imports to support grid stability as renewable penetration increases.
Key points
- Gas-fired generation remains crucial for meeting electricity demands when solar output drops.
- Indigenous gas helps cushion consumers from international liquefied natural gas price volatility.
- Prime Midstream plans to expand gas infrastructure services to new industries and regions.
What happened
Demand for gas-fired power generation continues to hold firm as electricity grids navigate fuel price swings and the integration of variable renewable energy sources, according to Prime Midstream. Speaking to Japanese media in Batangas City, Prime Midstream President and CEO Donnabel Kuizon Cruz explained that thermal plants running on gas are essential for maintaining stable supplies, particularly during evening hours when solar generation drops off significantly.
Cruz noted that facilities are frequently asked to exceed current baseline expectations due to ongoing market volatility and weather disruptions such as El Nino. To manage exposure to international fossil fuel price spikes, the firm relies on a dual approach combining domestic gas resources with imported liquefied natural gas. Historical pricing data indicates that domestic gas supplies generally remain more affordable than spot or term liquefied natural gas shipments, offering a vital buffer against external market shocks.
Future expansion plans
The Philippine NatGas Complex in Batangas City integrates domestic output from the Malampaya field with imported supplies via a terminal majority-owned by Prime Infra, alongside partners First Gen and Tokyo Gas. This operational setup provides fuel sourcing flexibility for local power generators.
Looking beyond the immediate power generation sector, leadership at Prime Midstream intends to widen the scope of its infrastructure network. The company is currently evaluating pathways to supply natural gas to diverse industrial clients. Furthermore, feasibility assessments are underway to extend distribution networks outside the Luzon region into the Visayas and Mindanao archipelagos.
Why it matters
For energy investors and policymakers across developing markets, the Philippine experience underscores the complex operational dynamics of managing energy transitions. Balancing growing renewable energy capacity with the immediate need for baseload reliability requires robust midstream infrastructure and diversified fuel sourcing. As nations seek to protect consumers from international commodity price swings, integrating domestic production with strategic import terminals offers a viable blueprint for energy security. Policymakers must carefully weigh how domestic gas reserves can be leveraged to insulate local economies from global market turbulence while simultaneously expanding access to commercial and industrial end-users.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Grids decide whether generation becomes power that homes and businesses can rely on. Generation mix, transmission and distribution losses, and tariffs together shape reliability and the case for investment.
94.8% of people in Philippines had electricity in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
