Business World Online
Posted on February 09, 2011 10:14:38 PM
SAN MIGUEL Corp. plans to expand its Limay combined-cycle power facility to 1,200 megawatts (MW) from the current 620 MW in preparation for its conversion into a natural gas-fed plant.
San Miguel President and Chief Operating Officer Ramon S. Ang told reporters the expansion was needed for the diesel plant to use liquefied natural gas (LNG). “The conversion will push through. If you convert Limay to LNG, for it to be viable, you need to make it 1,200 MW. That’s the minimum size so the LNG conversion will be viable,” said Mr. Ang.
The conversion and expansion will cost about $1 billion, including $600 million for an LNG tank farm in Limay.
San Miguel won the bid for the Limay power plant in August 2009 for $13.5 million.
Mr. Ang said the company was expecting higher electricity demand this year along with growth in the economy. “If the performance of the economy continues, [power] demand will increase every year. So far, we’re seeing a strong economy and therefore we are very bullish to increase capacity,” said Mr. Ang.
San Miguel is currently the biggest trader of electricity. It owns the independent power producer administrator contracts for the 1,200-MW Sual coal-fired power plant, the 345-MW San Roque hydropower plant, and the 1,200-MW Ilijan natural gas power plant.
Shares in San Miguel, which has a market value of almost $14 billion, ended up 0.05% at P184.90 apiece in a market that slipped 0.91%.
The stock price has more than doubled since late October.
San Miguel’s profits fell by almost 80% to P12.7 billion in the nine-month period that ended September 2010 in the absence of one-time gains.
After dominating the local food and beverage sector, San Miguel has aggressively expanded into sectors such as infrastructure, transport, energy and power generation, and plans to invest $4 billion over the next five years.
Mr. Ang said San Miguel will bid for all major infrastructure projects the government offers under its public-private partnerships program. “We need to see the terms of reference. We will participate in all tenders as we believe there is strong competition for these projects,” he said at the sidelines of a government economic briefing.
San Miguel has also set its sights on a stake in the Tampakan project, one of the largest-known undeveloped copper-gold deposits in the world, in southern Philippines. Last year it paid $40 million for a 10.1% stake in Indophil Resources NL, which has a 37.5% stake in the $5.2-billion project.
Mr. Ang said San Miguel’s due diligence on Indophil will continue even if an exclusivity period expires today without the company making a firm offer for a takeover. -- Emilia Narni J. David and Reuters
The conversion and expansion will cost about $1 billion, including $600 million for an LNG tank farm in Limay.
San Miguel won the bid for the Limay power plant in August 2009 for $13.5 million.
Mr. Ang said the company was expecting higher electricity demand this year along with growth in the economy. “If the performance of the economy continues, [power] demand will increase every year. So far, we’re seeing a strong economy and therefore we are very bullish to increase capacity,” said Mr. Ang.
San Miguel is currently the biggest trader of electricity. It owns the independent power producer administrator contracts for the 1,200-MW Sual coal-fired power plant, the 345-MW San Roque hydropower plant, and the 1,200-MW Ilijan natural gas power plant.
Shares in San Miguel, which has a market value of almost $14 billion, ended up 0.05% at P184.90 apiece in a market that slipped 0.91%.
The stock price has more than doubled since late October.
San Miguel’s profits fell by almost 80% to P12.7 billion in the nine-month period that ended September 2010 in the absence of one-time gains.
After dominating the local food and beverage sector, San Miguel has aggressively expanded into sectors such as infrastructure, transport, energy and power generation, and plans to invest $4 billion over the next five years.
Mr. Ang said San Miguel will bid for all major infrastructure projects the government offers under its public-private partnerships program. “We need to see the terms of reference. We will participate in all tenders as we believe there is strong competition for these projects,” he said at the sidelines of a government economic briefing.
San Miguel has also set its sights on a stake in the Tampakan project, one of the largest-known undeveloped copper-gold deposits in the world, in southern Philippines. Last year it paid $40 million for a 10.1% stake in Indophil Resources NL, which has a 37.5% stake in the $5.2-billion project.
Mr. Ang said San Miguel’s due diligence on Indophil will continue even if an exclusivity period expires today without the company making a firm offer for a takeover. -- Emilia Narni J. David and Reuters
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