State-owned Power Sector Assets and Liabilities Management Corp. turned over the 1,200-megawatt Ilijan natural gas-fired power combined cycle power plant in Batangas province to conglomerate San Miguel Corp.
San Miguel unit SMC Global Power Holdings Corp. said in a disclosure to the Philippine Dealing & Exchange Corp. on Tuesday that PSALM and South Premiere Power Corp. executed the deed of sale on June 3.
SMC Global said the move was pursuant to the administration agreement of SPPC with PSALM on the Ilijan plant that took effect on June 26, 2010. PSALM did not provide a separate statement.
Under the administration agreement, PSALM should turn over the plant upon SPPC’s full settlement of the monthly payments.
SMC through SPPC administers the output produced by the Ilijan power plant under its independent power producer administration agreement with PSALM. SPPC was appointed the IPP administrator for the project in 2010.
SMC won as the highest bidder for the appointment of an IPPA to manage the contracted capacity of the National Power Corp. in the 1,200-MW Ilijan power plant in 2010 with a bid of $870,000,473.
Before the turnover, the Ilijan power plant was operated by Korea Electric Power Corp. through KEPCO Ilijan Corp. under a build-operate-transfer contract which expired on June 4.
The Ilijan power facility, which started commercial operations on June 5, 2002, is a flagship project of the government that uses natural gas from the Camago-Malampaya gas field in northwest Palawan.
PSALM/NPC supplies natural gas to the Ilijan power plant from the Malampaya gas project under a gas supply agreement with Shell Exploration Philippines B.V. which also expired on June 4.
Shell Philippine Exploration B.V. earlier said the Malampaya gas field would end its supply and purchase agreement with Ilijan gas-fired plant.
SPEX, the operator of the project, issued the statement on behalf of Malampaya joint venture partners UC38 LLC and PNOC Exploration Corp. Supply from the Malampaya gas project has been dwindling in recent years and is expected to be depleted by 2024.
It is not clear where the Ilijan plant will source its gas supply following the end of the GSPA. Ilijan plant can also run on diesel.
SMC earlier said it was looking at tapping the banked gas or unutilized gas from the Malampaya and imported liquefied natural gas as fuel.
Aside from Ilijan, other power plants that run on Malampaya natural gas are Sta. Rita power station (1,000 MW), San Lorenzo power station (500 MW), San Gabriel power station (414 MW) and Avion power station (97 MW). Together, they generate more than 3,200 megawatts, representing about a fifth of the national power demand.