The development of a Philippine natural gas industry was initially conceived after the 1989 discovery of the deepwater Camago gas field offshore northwest Palawan by Occidental Petroleum (OXY). The field was initially estimated to contain one trillion ft3 (tcf) of recoverable natural gas and was then the largest hydrocarbon discovery ever made in the country. However, the field was in very deep water (∼1 km) and far from the power generation market in Luzon and, thus, was deemed uneconomic.

Subsequent feasibility studies suggested that the power sector in Luzon could provide a viable gas market, provided gas reserves were...

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