DOE wants to convert Malaya thermal plant into LNG facility

By Lenie Lectura – February 26, 2017

from Business Mirror

The Department of Energy (DOE) said the winning bidder of the 650-megawatt (MW) Malaya Thermal Power Plant Complex (MTPP) should convert the power asset into a liquefied natural-gas (LNG) facility.

“Part of the condition is to convert Malaya into LNG. We want power supply from Malaya to continue once privatized,” Energy Secretary Alfonso G. Cusi said.

However, the bid documents do not indicate the conversion of the Malaya plant into an LNG facility. As such, there may be a need to start the bidding process all over again.

“If we have to rebid it for that reason then it’s better to rebid it,” Cusi said.

Four firms have expressed interest to participate in the auction.  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. The bidders can conduct the due diligence up to March 6.

“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 may 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 explained.

The Power Sector Assets and Liabilities Management (PSALM) Corp. manages the assets and liabilities of National Power Corp.  as mandated by the Electric Power Industry Reform Act of 2001. It will also undertake the bidding process.

Situated in Pililia, Rizal province, the Malaya plant was rehabilitated in 1995 by the Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement. It consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler.

Malaya currently serves as a security plant as it was designated as a must-run unit (MRU) meant to address any instability or supply deficiency that may occur as a result of sudden unavailability of any operating power plants in the grid.

The MTPP, said PSALM earlier, will continue operating as an MRU until it is privatized.

Also, Cusi agreed with Finance Secretary Carlos G. Dominguez III who proposed to rehabilitate the Agus and Pulangi power plant complexes before it is sold to prospective investors.

“Rehab it first before it is privatize, that is correct. This is the opportune time to rehab it first then privatize after,” Cusi said.

Dominguez is the current chairman of the PSALM Board. “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.

The Agus complex has 728-MW installed capacity, consisting of six cascading power plants strategically located along the Agus River. The Pulangui complex is a 255-MW hydro power facility with three generating units. Both facilities, however, already have derated generation.

Both supply Mindanao electric power consumers more than 50 percent of their total electricity requirements.