Filinvest Development shelves plans for LNG power plants

Business World Online

Posted on May 25, 2012 07:43:27 PM

BY FRANZ JONATHAN G. DE LA FUENTE, Reporter

FILINVEST DEVELOPMENT Corp. has shelved its earlier-announced plans to venture into gas-fired power plants, preferring instead to invest about P25 billion in other forms of energy instead, company officials said on Friday.

“LNG (liquified natural gas) will be on the back burner for a while. It doesn’t mean there won’t be opportunities there, but in the short term we will focus on other types of power plants so we can accomplish some movement,” said Jonathan T. Gotianun, Filinvest Development chairman at the company’s annual stockholders’ meeting.

Last year, Filinvest Development, through power unit FDC Utilities, Inc., had announced it was keen to build four LNG power plants across the country. But rising gas costs appear to have dashed the group’s plans.

“Our LNG plans have been overtaken by the tsunami incident in Japan last year. As a result of that, prices of LNG went sky high. We had to look for other niches in the industry, so we signed up around 70 megawatts (MW) worth of contracts during that period,” Jesus N. Alcordo, FDC Utilities president, told reporters following the stockholders’ meeting.

Demand for Japanese LNG ballooned in the aftermath of the meltdown of some of Japan’s nuclear plants following a tsunami last year, causing a spike in worldwide prices for the commodity.

Nevertheless, FDC Utilities aims to end the year with 200 MW worth of contracts, comprised of a mix of clean coal and biomass plants, Mr. Alcordo said. He said plants should be developed in two to three years.

“Very roughly, we are looking at a P25-billion project cost for the 200-MW contracts, but this will depend on a number of factors as we go through the final designs, location, size, and specific technologies,” Mr. Gotianun said.

Officials further said the company may also bid for plants and contracts to be auctioned off by the state-run the Power Sector Assets and Liabilities Management Corp. (PSALM).

“PSALM privatization bids will depend if we are successful in increasing our capacity this year. If opportunities will come around, then we will actively pursue,” Mr. Gotianun said.

Shares of Filinvest Development slid by 1.20% to P4.10 on Friday versus P4.15 the day previous.   source