Phoenix, Chevron interested to bid for Ilijan diesel-fuel supply contract

by Lenie Lectura, February 2, 2015
from BusinessMirror


TWO oil firms have expressed interest to supply Ilijan power plant with diesel fuel, according to the Power Sector Assets and Liabilities Management Corp. (PSALM) on Monday.

“There are two interested bidders. These are Chevron and Phoenix,” PSALM President Emmanuel Ledesma Jr. said in a text message.

PSALM held on January 30 a pre-bid conference after it recently started soliciting bids for the supply and delivery of 60 million liters of industrial diesel oil (IDO) for the Ilijan power plant.

Ledesma said that the winning bidder is required to “deliver a minimum of 4 million liters, and that they will deliver a minimum of 30 million liters three days after Malampaya shutdown within 15 days.” The state firm has set aside an approved budget for contract of P1,664,911,472 for the fuel procurement.

“The IDO procurement project shall ensure the operation of Ilijan this year, especially with the anticipated tightening of power supply in the summer,” the PSALM chief said.

Bid submission deadline is on February 16. Chevron Philippines and Phoenix Petroleum paid 75,000 each to procure bidding documents.

Last week the Department of Energy (DOE) said one unit of the power plant will run on liquid fuel. The second unit will proceed with its 30-day scheduled maintenance work. The Ilijan power plant in Batangas is composed of two units, with a generating capacity of 600 megawatts (MW) each. It is one of the natural-gas power plants fueled by the Malampaya gas facility.

Ilijan Block B is scheduled for a 30-day maintenance work to coincide with the Malampaya gas facility from March 15 to April 15.

Block A can still be utilized in the absence of natural gas because the power plant is designed to run on both liquid fuel, which is either diesel or biodiesel (B2), and natural gas.

“Running Ilijan on liquid fuel will ensure the much-needed additional energy. PSALM is prepared for that,” Ledesma assured.

There is an anticipated power shortage this summer. Based on latest projection, the DOE said Luzon would need 782 MW, of which 135 MW are needed to meet the required regulating reserve, and 647 MW to meet the required contingency reserve.

Aside from Ilijan, the Malampaya gas field in offshore also supplies natural gas to two more natural gas power plants in Luzon—the 1,000-MW Santa Rita and 500-MW San Lorenzo power plants, both owned by the Lopez group.

The shutdown of the Malampaya facility along with several power plants with a total capacity of 4,162.6 MW that will either go on scheduled maintenance shutdown and forced outage until July of this year contribute to the lack of power supply.