SMC Global Power Holdings Corp., the power arm of San Miguel Corp. (SMC) has offered the capacity of its Ilijan natural gas to Manila Electric Co. (Meralco).
In a statement on Sunday, SMC President Ramon S. Ang said the offer covers the full 1,200 megawatts (MW) capacity of the Ilijan plant, which accounts for about 10-12% of Luzon’s dependable capacity.
Mr. Ang said SMC Global Power’s offer will only cost Meralco “a minimal P1.00/kwh (kilowatt-hour) in capital recovery fee or half of its capital cost on the facility.”
He said that SMC Global Power’s South Premiere Power Corp. (SPPC), the administrator of the power plant in Ilijan, Batangas is currently in discussions with Meralco over the offer.
In June, SMC purchased the remaining banked gas of Philippine National Oil Co. (PNOC), paying $1.2 billion for 70.26 petajoules (PJ).
SMC said this will support the projected fuel requirements of SPPC’s Ilijan power plant until February 2024. However, PNOC has yet to deliver the banked gas.
“SMC Global is also willing to work with Meralco in using its 70 PJ banked gas acquired from PNOC at a cost much lower than the prevailing cost of coal power generation,” Mr. Ang added.
Aside from its Malampaya allocation, Mr. Ang also proposed to source fuel for the Ilijan facility from liquid fuel which Meralco will pay for.
Energy Secretary Raphael P.M. Lotilla has warned of the possibility of red and yellow alerts in 2023 if the output of Ilijan is not made available. Ilijan’s natural-gas supply agreement expired in June.
“We will continue to look for ways to help make sure consumers will still have some protection from the effects of skyrocketing global fuel prices. This is one of the best and most direct ways we can show solidarity with our people in this time of crisis,” Mr. Ang said. — Ashley Erika O. Jose