Phoenix submits lowest bid for supply, delivery of oil to Ilijan power plant

by Lenie Lectura, February 22, 2015
from BusinessMirror

PHOENIX Petroleum Corp. submitted the lowest bid for the supply and delivery of 60 million liters of industrial diesel oil (IDO) for the Ilijan power plant in Batangas, one of the power plants fed by natural gas sourced from the Malampaya facility.

“Phoenix was the lowest bidder with a bid of P1.58 billion,” Power Sector Assets and Liabilities Management Corp. (PSALM) President Emmanuel Ledesma Jr. said in a text message.

Other bidders included Petron Corp. and Pilipinas Shell, added the PSALM official.

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

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

The Ilijan power plant in Batangas is composed of two units, with a generating capacity of 600 megawatts (MW) each.

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 said.

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

Aside from Ilijan, the Malampaya gas field offshore also supplies natural gas to two more natural-gas power plants in Luzon—the 1,000-MW Santa Rita and the 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, contributes to the lack of power supply.

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