September 18, 2018 | 12:06 am
LOPEZ-LED First Gen
Corp. said its offer to buy the government’s banked gas at $3.48 per gigajoules
could result in savings for electricity users of close to P0.60 per
kilowatt-hour (kWh)or a total of around P10 billion for the period starting
next month and early 2024, the year when the Malampaya gas-to-power contract
ends.
Jerome H. Cainglet,
First Gen vice-president and head of the gas business unit, said his “rough
estimate” of savings is the difference between the price the company offered to
buy the 97.67 petajoules banked gas owned by state-led Philippine National Oil
Co. (PNOC), and the price contracted by the 1,200 megawatt (MW) Ilijan power
plant.
“[A consumer using]
500-kWh per month would mean mga (around) P350 per month ang
matitipid (will be saved),” he said.
He qualified that the
figure represents only the electricity sold by the company. Distribution
utilities source energy from different sources, including the power produced by
gas-fired plants like those owned by First Gen.
“Sa mga regular,
’yung mga malilit na consumers na 200 kWh per month it would
equate to around P140 per month na mababawas sa binabayad nila,” he
said.
(For regular or small
consumers using 200 kWh per month, it would equate to a reduction of around
P140 per month from their bills.)
Mr. Cainglet made the
computations during a hearing at the House of Representatives, which inquired
into the Malampaya banked gas.
Lawmakers sought
answers whether the banked gas will be impaired if it remains unsold once
Service Contract 38 held by the consortium that runs the offshore Palawan
gas-to-power project expires on Feb. 23, 2024.
Sought for comment,
PNOC President and Chief Executive Officer Reuben S. Lista said should he
accept the price offered by First Gen of $3.48 per gigajoules, questions might
be raised later since the listed company previously offered to buy at $4.50 per
gigajoules.
He said several
companies are interested in the banked gas, including the Ilijan power plant,
which has a contract with the consortium that ends in 2022.
“This is the reason why
PNOC is not worried that the banked gas will be stranded,” he said.
Mr. Lista earlier
announced that PNOC would be negotiating the sale of the banked gas at a price
lower than what it was willing to sell before, after the company twice invited
buyers this year but none came forward with an offer.
He said he would be
seeking authorization from the PNOC board to allow the company’s management to
enter into “comprehensive discussions” or “negotiations” at a price lower than
the $6.616 per gigajoules under the Ilijan gas-fired power plant’s gas sale and
purchase agreement, or GSPA.
Under a negotiated
deal, the Ilijan price will become PNOC’s price ceiling, he said, but declining
to give a floor price. It was the minimum price the company was willing to sell
before.
Mr. Lista disclosed
that First Gen had offered to buy the gas at $4.50 per gigajoules during a
verbal discussion. But he said when PNOC made a formal invitation, the
Lopez-led group offered $3.48 per gigajoules. A petajoule is equal to a million
gigajoules.
The gas, which was paid
by the government for its future use, is banked in the reservoir of the
Malampaya deepwater gas-to-power project offshore Palawan. A PNOC unit is part
of the consortium that developed and operates the project.
The banked gas was
bought by PNOC from the Department of Energy in 2009, including all the rights,
benefits and entitlements of the total 108.6 petajoules valued at P14.4
billion.
The corporation since
then has been trying to sell the gas but was only able to sell 4.61 petajoules
to Power Sector Assets and Liabilities Management Corp. in 2013 for P937
million. Another portion at 6.324 petajoules was sold to Pilipinas Shell
Petroleum Corp. in 2015 for P2.5 billion.
Five gas-fired power
plants in Batangas province, with a combined capacity of 3,211 MW, are the main
customers of the Malampaya gas find. The offshore Palawan project is expected
to start be depleted starting in 2022 to 2024, but PNOC said the gas find could
be stretched until 2027. — Victor V. Saulon
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