The power business of San Miguel Corp. (SMC) has expressed interest in converting the 650-megawatt (MW) Malaya Thermal Power Plant (TPP) into a liquefied natural-gas (LNG) plant.
SMC President Ramon S. Ang said his company will participate in the auction should a plan to rebid the power asset pushes through. “Yes, we want to,” Ang said in a text message.
The bidding process for the plant has already commenced, with four firms interested to participate in the auction.
SMC, however, was not able to submit its letter of interest to the Power Sector Assets and Liabilities Management Corp. (PSALM), which manages the assets and liabilities of the National Power Corp., as mandated by the Electric Power Industry Reform Act of 2001.
The bidding process could start all over again, after Energy Secretary Alfonso G. Cusi said he intends to require the winning bidder to convert Malaya plant, which runs on diesel, into an LNG plant.
“Part of the condition is to convert Malaya into LNG. We want power supply from Malaya to continue once privatized. If we have to rebid it for that reason then it’s better to rebid it,” Cusi said.
The bid documents purchased by the four interested firms do not indicate the conversion of the Malaya plant into an LNG facility. Cusi said it is up to PSALM to do this, since it is the one undertaking the
bidding process.
Cusi, as energy secretary, sits as PSALM’s vice chairman in the PSALM Board. The finance secretary is the chairman of the PSALM Board.
In the planned conversion, Cusi cited the need for more power-generating capacity, particularly baseload power, which is defined as power that runs 24/7. LNG, Cusi said, has been identified as baseload.
“What I am trying to say is that even after privatization we would not run out of power. The country still has to source power, so why not convert it to LNG so we can have baseload power?
“It’s an expression of concern on my part. The winning bidder may just operate Malaya as it, is so why not convert it to a superior technology that will qualify as baseload,” Cusi said?
APT Global Inc., Phinma Energy Corp., Riverbend Consolidated Mining Corp. and AC Energy Holdings Inc. submitted letters of interest. Their bids will be evaluated in preparation for the auction set on March 8 as stated in the original bid documents. PSALM has yet to announce if a new
auction will take place.
Ang has also expressed interest to bid for the Agus and Pulangi Power Plant Complexes.
“Yes, SMC will join the bid of all government projects,” he added.
Finance Secretary Carlos G. Dominguez III earlier proposed to rehabilitate the power facility before it is sold to prospective investors. “We have to fix it first. It’s operating only 40 percent of its total capacity,” he said, adding that an option being looked at is to privatize the operation and maintenance of the power asset.
Cusi agreed. “Rehabilitate it first before it is privatize, that is correct. This is the opportune time to rehab it first then privatize after.”
The Agus complex has 728-MW installed capacity, consisting of six cascading power plants strategically located along the Agus River.
The Pulangi complex is a 255-MW hydropower facility with three generating units. Both facilities, however, already have derated generation. Both supply Mindanao electric power consumers more than 50 percent of its total electricity requirements.