PLANS are underway to use the natural gas reserves in Alegria town in Cebu to fuel a 50-megawatt power generation plant.

During her State of the Municipality Address (Soma) delivered at the Alegria Municipal Plaza on March 24, 2022, Mayor Verna Magallon said the fourth-class municipality in southwest Cebu had been blessed with enough crude oil and gas deposits in seven of the town’s well sites developed since 2014 in Barangay Montpeller.

She said a modular refinery that would provide 15 gas stations to Alegria’s neighboring towns is already being prepared. And in addition to that, for the gas, plans were being made for a 50-megawatt power generation facility.

“Kining maong mga deposits gi-andam karon na mahimo-an og modular refinery nga mo provide og kinse ka gasolinahan sa atong mga kasilinganang mga lungsod (These gas deposits, we are preparing to set up a modular refinery that can be used for 15 gas stations in the neighboring towns),” the mayor said. “Gawas niini, ang gas gihimo-an og plano nga 50 megawatt nga power generation facility (There are also plans to use the gas deposits for a 50 megawatt power generation facility).”

A modular refinery is a crude oil processing facility that requires less capital investment than a traditional full-scale refinery facility.

The crude oil in Alegria still needs to be refined before it can be sold to the public as usable products, such as gasoline, diesel and other forms of petrochemicals, Department of Energy (DOE) Visayas officer-in-charge Jose Rey Maleza explained in 2019. He said most of the crude oil’s buyers were from Luzon.

Magallon said the two projects could help the town generate huge annual income that it could use to build a sustainable energy sector harnessing renewable power sources such as water and wind.

Through the provision of cheap and stable power, she said, Alegria would be able to attract capitalists to invest in the town, which could pave the way for Alegria’s becoming a city in the future.

In 2018, the DOE and service contractor China International Mining Petroleum Company Ltd. (CIMP) signed a Joint Declaration of Commerciality after Alegria was deemed commercially viable with reserves of oil and natural gas that could last until 2037.

In a May 2018 SunStar Cebu report, Mayor Magallon said 60 percent of the income from the oil field would go to the National Government while 40 percent would go to CIMP.

The National Government’s share would then be divided among local government units: 18 percent would go to the Alegria Municipal Government, 14 percent to Barangay Montpeller, which hosts the oil field, and eight percent to the Provincial Government.

In February 2020, however, the Municipality of Alegria said it had received only P100,000 as its share from the oil project, instead of the anticipated P600,000 for 2018 and 2019, prompting Cebu Gov. Gwendolyn Garcia to ask the DOE to provide a copy of the oil extraction project’s financial statements, including the operations cost and gross proceeds for 2018.

In November 2020, the US Energy Information Administration said the Philippines had only two active petroleum fields: “Galoc, an offshore field in the Northwest Palawan Basin, and Alegria, an onshore field in the Province of Cebu.”

Renewable energy

In her Soma delivered almost entirely in Cebuano last week, Mayor Magallon said Alegria was also blessed with a large water source.

“In the last report of the MGB (Mines and Geosciences Bureau), the validated water sources in Alegria have reached 169. These are big sources of renewable energy that need to be developed,” she said in Cebuano.

She said Alegria had the biggest water source among the five towns comprising the Badam Watershed, which are Badian, Alegria, Dalaguete, Alcoy and Malabuyoc.

Of the five towns, Alegria is the source of 71.3 percent of the water, she said.

In her speech, Magallon said farming and fishing were the primary sources of livelihood of the town.

But that may change with the town’s push into energy generation.