Meralco, First Gen woo LNG-fired power projects

by Myrna Velasco – December 20, 2015

from Manila Bulletin

The power generation arm of Manila Electric Company (Meralco) and Lopez-owned First Gen Corporation are ‘on courtship phase’ over probable business marriage on the former’s blueprinted gas-fired power projects.

When asked by media on the reported partnership talks, Meralco President Oscar S. Reyes simply stated that “we are looking at each other,” without necessarily giving details as to how discussions have been moving forward.

He stressed that there are parameters they have been weighing, but the most important one is ensuring that the business deal “will be good for the consumers.”

Reyes added “we have been continuously looking at gas, and we are assessing how it will still fit into our planned portfolio of power generation capacities.”

First Gen’s plan is to put up three-phased power plant projects of 414-megawatt capacity each to be fed with liquefied natural gas (LNG) or additional natural gas from the Malampaya field. These projects with aggregate capacity of 1,242MW are targeted on stream from 2016 to 2019.

The company is currently on commercial commissioning phase for its 97MW Avion aero-derivative power facility, a peaking plant that can run alternatively on gas.

Of the LNG-fired power plants, it will be the 414-MW San Gabriel project that the Lopez firm has been eyeing to get on stream next year.

The next one will be its proposed 414MW Sta Maria project; while the third ‘saint plant’ is still being firmed up.

The comprehensive investment plan set out by the Lopez group will be to integrate its gas-fired projects with LNG terminal to be sited proximate to its power assets in Batangas.

Meralco, for its part, has initially planned to embrace gas as ‘fuel option’ in its capacity mix – but due to cost considerations, it opted to pursue its planned 1,200MW Atimonan project with coal technology.

Joint venture talks had also been carried out with Osaka Gas Co. Ltd. of Japan, but a business deal on a gas-fired power project is not on the cards yet.