PETRON Corp. looks to sell back the 140-megawatt (MW) solid fuel-fired power plant in Bataan it acquired from a unit of SMC Global Power Holdings Corp. three years ago.
In a statement issued Tuesday, the listed oil company said it has signed a memorandum of understanding with SMC Powergen, Inc. for the sale of the plant in Limay, Bataan.
The power plant, which previously had a capacity of 70 MW, was originally owned by Petron until it was acquired by SMC Powergen in September 2013.
SMC Powergen doubled the plant’s capacity to 140 MW in 2014, before being acquired by Petron again in December 2016 for P20.03 billion, in a bid to lower its power and steam costs.
After Petron’s acquisition, the plant was used to supply the power requirements of the company’s Bataan refinery that produces 180,000 barrels per day. The facility was previously used for the SMC Powergen’s production of power and steam.
SMC Global Power will be conducting a preliminary review of the power plant and its operations over a six-month period to determine whether it is good for acquisition.
Petron and SMC Global Power are both part of diversified conglomerate San Miguel Corp., which also has core interests in beverage, food and packaging, and infrastructure.
Earlier this year, Petron President and Chief Executive Officer Ramon S. Ang said it will hold off expansion efforts due to fluctuating global crude oil prices. The company had committed to spend $1 billion to upgrade its refinery and expand its retail network over three years. Of this, about $600 would have been spent for its Limay, Bataan refinery.
Meanwhile, SMC Global Power wants to expand its renewable energy portfolio while developing clean coal power plants.
Petron’s net income attributable to the parent fell 75% to P2.23 billion in the first half of 2019, amid a six percent decline in gross revenues to P254.81 billion.
Shares in Petron dropped 0.39% or two centavos to close at P5.11 each at the stock exchange on Tuesday. — Arra B. Francia