PNOC-EC, SMC partnership in Limay power is OK – Del Pilar

State-run Philippine National Oil Co.-Exploration Corp. (PNOC-EC) is willing to partner with San Miguel Corp. (SMC) in converting the 620-megawatt (MW) Limay combined cycle power plant into a natural gas-fired power plant. PNOC president and CEO Rafael del Pilar said PNOC-EC and San Miguel had initial talks on the conversion of the Limay plant in Bataan. "But we have not submitted a formal proposal yet. We will submit though. There is no timetable but we're hoping to start negotiations this year." Earlier, SMC president Ramon Ang said the power shortage in Luzon prompted the company to assess its options – whether or not to pursue the conversion project, in which SMC may invest some $350 million. PNOC-EC said in a regulatory filing that the "preparation of business proposal for the conversion of Limay power plant and information memorandum for the joint venture process is ongoing." The conversion is needed for the anchor load to justify construction of the planned 140-kilometer Bataan-Manila – BatMan 2 – pipeline. BatMan 2 is part of government's proposed integrated liquefied natural gas (LNG) project in the municipalities of Limay and Mariveles, with an estimated cost of $1 billion. The integrated project is composed of setting up of an LNG receiving terminal in Limay, conversion of the Limay power plant, and development of a 600-MW greenfield power plant inside the PNOC-Alternative Fuels Corp. Industrial Park. PNOC-EC earlier said it was in talks with XinAo Gas of China, Mitsubishi Corp. of Japan, and PTT Public Co. Ltd. of Thailand to develop BatMan 2. It was also in talks with Swiss firm Astra on LNG supply. The Limay plant, which the government declared as a must-run unit, uses diesel as fuel. It has a higher generation price at the wholesale electricity spot market. —JE, GMANews.TV