Team Energy, AboitizPower joint venture to expand Pagbilao power plant

Business Mirror
THURSDAY, 29 MARCH 2012 19:40 PAUL ANTHONY A. ISLA / REPORTER


TEAM Energy Corp., the joint venture between Tokyo Electric Power Corp. (Tepco) and Marubeni Corp., is preparing to expand by another 400 megawatt (MW) the 735-MW Pagbilao coal-fired power plant.


Federico Puno, Team Energy president and chief executive, said in a press conference that they have agreed to have a 50-50 joint venture with AboitizPower Corp., the independent power producer administrator (Ippa) for the contracted capacity of the Pagbilao power plant.


Puno said the expansion project would entail an investment of $600 to $700 million, which they plan to finance through equity and project financing.


He said they target to have an engineering, procurement and construction (EPC) contractor before the end of the year to be able to have the expansion plant operational by December 2015.


“Our target is to finish everything [documentation and permitting] within the year and to do groundbreaking in the first quarter next year and have the plant completed by December 2015,” Puno said.


Puno said they have been in talks with Mitsubishi Corp. for the EPC contract of the expansion plant. The two units were also put up by Mitsubishi.


“Should they decline to do the project, then a bidding will be held in June,” he added.


Puno said the expansion plant would be designed to be a pulverized coal boiler, which is similar to the first two units of the Pagbilao coal-fired power plant and for them to be able to use the common facilities of the power plant.


“To take advantage of the synergy, the plant must use the same technology as the two old units,” he added


Puno earlier said they want to expand Sual and Pagbilao to take advantage of the common facilities such as the pier, and the water treatment plant.


Puno said Tepco will conduct the feasibility studies for the expansion of Pagbilao and Sual, while actual construction will depend on the results of the feasibility study that includes market demand starting 2014.


Puno admitted that it would be hard for Team Energy to undertake the expansion on its own.


He said, “If we do it ourselves we have to enter in a contract with them for joint facility utilization for the jetty and other common facilities, but going into joint venture with them is much better.”


The Sual and Pagbilao are both operated by Team Energy under build-operate-transfer contracts with the National Power Corp. that will expire in 2024 and 2025, respectively.


However, at the end of the cooperation period between Team Energy and Napocor, the Sual and Pagbilao will turned over to its Ippas—San Miguel Global Power Holdings Corp. and AboitizPower-led Therma Luzon, Inc., respectively, as its new owner and operator.