Cusi wants to convert Malaya Thermal Power Plant into LNG plant

By Danessa Rivera (The Philippine Star) | Updated February 27, 2017 - 12:00am

http://www.philstar.com/business/2017/02/27/1676008/cusi-wants-convert-malaya-thermal-power-plant-lng-plant

MANILA, Philippines -  Energy Secretary Alfonso Cusi wants to convert the 650-megawatt (MW) Malaya Thermal Power Plant (TPP) in Rizal into a liquefied natural gas (LNG) facility as part of plans to ensure the country with reliable power supply in the future.

“Part of the condition is to convert it into LNG plant…so we won’t lose capacity of around 600 MW,” he said.

The plant’s conversion would allow the country to have a cleaner, more efficient and more reliable power plant, the Energy chief said.

 “From diesel, which is an inefficient and expensive power source… what we want is the country will still have 600 MW when we convert it into cleaner power and which we can use as a baseload power. As it is, the plant runs on diesel oil, which is only for peaking,” Cusi said.

However, converting the diesel power plant into an LNG plant should still be studied since the bidding process for the power facility has already started, he said.

Currently, the Malaya TPP is among the state-owned power plants scheduled to be privatized by

PSALM, the entity created by the Electric Power Industry Reform Act (EPIRA) to privatize government-owned power assets, has set the auction on March 8. The asset will be sold on an “as is, where is” basis.

So far, four power companies have expressed interest in the sale of the Malaya TPP namely APT Global Inc., Phinma Energy Corp., Riverbend Consolidated Mining Corp. and AC Energy Holdings Inc.

Cusi said it would be better if PSALM would re-bid the Malaya TPP to include the conversion to an LNG plant in the transaction documents.

“That has to be really looked at,” he said. “If we need to re-bid for that reason, then it would be better if we re-bid it.”

Meanwhile, the Energy chief is also looking at rehabilitating the 982-megawatt Agus-Pulangi hydroelectric power plants (HEPP) in Mindanao before selling the facilities, especially with an oversupply scenario looming in the region by 2018.

“Having more than enough time in Mindanao, it is an opportune time to rehabilitate the plants. After that, we can privatize it. We don’t like that if it would not be run given its current situation,” Cusi said.

Earlier, Finance Secretary Carlos Dominguez, who chairs PSALM, said rehabilitating the Agus-Pulangi HEPP is the top priority before undertaking any privatization process for the facility.

Currently, the Agus-Pulangi HEPP can only supply 40 percent of its total nameplate capacity to the Mindanao grid. However, it is considered as the cheapest power source in Mindanao, with capacity being sold at around P2.70 per kilowatt-hour.

PSALM is undertaking a study with International Finance Corp. (IFC) to determine the best way to privatize the Mindanao power asset.