MANILA, Philippines—The world’s biggest geothermal producer, Chevron Corp., and locally listed APC Group Inc. plan to invest $300 million (about P13 billion) to put up a 100-megawatt geothermal power facility in Kalinga.
In a disclosure to the Philippine Stock Exchange, the APC Group said that since the project was covered by a renewable energy service contract, it “will be the first major international investment to the country under the Renewable Energy Act of 2008.”
The APC Group explained that the proposed project involved the development of steam fields that were estimated to be capable of generating 100 MW in new capacity, providing an additional source of clean, indigenous and reliable baseload power to the Luzon grid.
The geothermal project will be undertaken by the subsidiaries of Chevron and APC Group, namely Chevron Kalinga Ltd. and Aragorn Power and Energy Corp.
Aragorn Power, together with its partner Guidance Management Corp. (GMC), is the holder of a geothermal renewable energy service contract granted earlier by the Department of Energy. The service contract license covers some 26,000 hectares of prospective geothermal resource area in Kalinga.
Chevron Kalinga and Aragorn Power recently signed two agreements that would push the planned power project forward.
According to the APC group, the two subsidiaries signed a farm-out agreement, which would give Aragorn Power and GMC the option to take an equity position of up to 40 percent in the geothermal project.
The parties also signed a joint-operating agreement, which states that Chevron will be responsible for the exploration, development and operation of the steam field and power plant activities.
Chevron, through Chevron Geothermal Philippines Holdings Inc., develops and produces steam for the 289-MW geothermal facility in Tiwi, Albay, and the 458.53-MW power plant in Mak-Ban, located in areas in Laguna and Batangas. These geothermal facilities supply power to the Luzon grid.
According to the company’s website, Chevron expects to sign a 25-year renewable energy contract with the Philippine government before year’s end to continue operating the steam fields and to supply steam to the two geothermal plants, after the government sold these facilities to Aboitiz Power Corp. in May 2009. Chevron, in particular, was working on a Financial or Technical Assistance Agreement (FTAA) with the Aquino administration.
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