SAN Miguel Corp. (SMC) said it is open to any form of tie-up with First Gen Corp. for the latter’s planned $1-billion liquefied natural gas (LNG) terminal.
Ramon S. Ang, SMC president and chief operating officer, told reporters his group and First Gen “are quite close, so there’s no problem” if either one of them takes the controlling stake.
“We have a lot of options,” he said.
“Whether they build it themselves, or we do, or we enter into a joint venture, it’s okay with me,” he added.
SMC group looks after the 1,200-megawatt (MW) Ilijan power plant, which sits on a 60-acre site at Arenas Point, Barangay Ilijan, Batangas City.
SMC bid for and was appointed in 2010 as the independent power producer administrator of the plant by the Power Sector Assets and Liabilities Management Corp. (PSALM).
SMC has since assigned the administration contract to its unit South Premiere Power Corp., which PSALM consented to. PSALM handles the privatization of the power generation assets of government-owned National Power Corp. (Napocor).
The Ilijan plant was built and is owned by Korea Electric Power Corp. through its local unit Kepco Ilijan Corp. under a 20-year energy conversion agreement with Napocor under a build-operate-transfer scheme that expires on June 4, 2022.
The plant consists of two blocks with a rated capacity of 600 MW each. It can also run on diesel oil stored on site. Napocor supplies gas to the Ilijan plant from the Malampaya field in Palawan.
First Gen continues to prepare for a post-Malampaya gas era by setting up the country’s first LNG regasification terminal to be located at its clean energy complex in Batangas City.
First Gen has a portfolio of gas-fired power plants with a combined capacity of 2,017 MW as of 2017. It wants to complete the LNG facility in time for the expected depletion of the Malampaya field starting in 2024.
Mr. Ang said SMC plans to keep the power plant as a gas-fired facility “and we may even expand that.”
“Viable floating regasification terminals have a capacity of at least 3,000 MW,” he said.
Imported natural gas is liquefied for ease of shipping, then regasified or reverted to its former state in the country of destination.
He said the Ilijan plant could easily be expanded by 1,800 MW to a capacity of 3,000 MW. He said SMC has acquired the land adjacent to the plant, making the expansion possible.
Mr. Ang said SMC and First Gen have yet to talk about a possible partnership, but he is aware of the other company’s LNG project and its owner’s open call for local and foreign partners.
He urged Giles B. Puno, First Gen president and chief operating officer, to invite SMC as a partner to the project.
Earlier this month, Mr. Puno said First Gen intends to finalize a partnership arrangement for the project within the year. He said the selection of the partner is one of the “key deliverables” of the company in 2018.
“Ideally, we bring in maybe at least one foreign partner and potentially local partners as well,” he said. “We don’t have to solely underwrite this transaction.”
Mr. Puno described the facility as an “important infrastructure for the country,” making First Gen open to partnerships.
“We’ve been having this conversation with a number of foreign and local partners,” he said. — Victor V. Saulon