Meralco PowerGen Corp., a unit Manila Electric Co., will make a final investment decision on its planned $2-billion 1,500-megawatt integrated natural gas facility in Luzon within the year.
Meralco PowerGen is in talks with Osaka Gas of Japan for a joint venture in the planned liquefied natural gas project.
Meralco chairman Manuel Pangilinan said talks with the prospective partner were ongoing while the feasibility study had yet to be conducted.
“We’ll find out before the end of the year if it’s a go,” Pangilinan said.
Pangilinan said the parties were looking at an integrated natural gas facility that included both an LNG terminal and power plant.
“It would have to be… you need a gassification plant because we need to import gas. There is no more gas from Malampaya for the size of the plant. So there will be a gassification facility and a power plant,” he said.
The regasification facility will convert the imported LNG to natural gas for delivery to the power plant.
He said Meralco would likely take a 60 percent stake in the project while Osaka Gas would own 40 percent, if plans pushed through.
Pangilinan earlier said Osaka Gas, a leading liquefied natural gas supplier in Japan, wanted to build a natural gas power plant in the Philippines.
“They [Osaka Gas] want to build a gas [power] plant in the Philippines, [with] around 1,200 to 1,500 MW with Meralco,” Pangilinan said.
“They are keen to look at it. They are keen to invest in the Philippines,” he said.
He said the natural gas plant “might be done in phases, but it is up to 1,500 MW.”
He said the capital cost for an LNG plant “is not that much expensive than coal.”
“The capex [capital expenditure] is actually lower than a coal plant per megawatt, but the problem is the higher cost of power,” he said.
Pangilinan said he expected the project to materialize in the next three to five years, although the two companies had yet to inspect the proposed site.