Limay plant conversion tally may reach $1B

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WEDNESDAY, 09 FEBRUARY 2011 20:02 PAUL ANTHONY A. ISLA / REPORTER

CONGLOMERATE San Miguel Corp. (SMC) may spend $1 billion to convert the 600-megawatt Limay combined cycle power plant into a natural gas-fired facility, president Ramon S. Ang chief executive told reporters yesterday.

SMC will also expand the plant’s capacity to 1,200 megawatts (MW), Ang said.

San Miguel Energy Corp. (SMEC), the conglomerate’s power arm, is mulling the conversion of the 620-MW Limay combined cycle power plant into a liquefied natural gas (LNG) fired facility, “There is an ongoing study for our planned conversion [of the Limay power plant],” Ang said, adding that increasing the capacity would be ideal to make the conversion viable and the power plant efficient. At present, the Limay power plant is on standby since demand for power isn’t that high.

Besides converting the power plant itself, he added that there is a need to put up an LNG tank farm, purchase LNG-carrying vessels or ink supply agreements. 

A study is being conducted to help SMC determine the viability of the conversion project. “When the study is done and we see that the project is viable, then we will proceed with it,” he added. SMC, Ang said, is willing to spend the said amount for the Limay project.

Ang said they are very bullish the Philippine economy will continue to grow as it has been in the past few months. “If the economy continues to grow, then there will be a need to put up additional capacities,” he said.

Another unit, SMC Global Power Holdings Corp., has already completed its $300-million bond offering.

Apart from funding general corporate purposes, SMC said proceeds of the bond issuance is programmed for investments in power-related assets and prepay obligations of SMEC and other affiliates Strategic Power Development Corp. and South Premiere Power Corp.

SMEC currently holds the largest power capacity portfolio, accounting for 28.1 percent of the Luzon grid and 21.4 percent of the national grid. Its assets include the Limay facility and it also manages the contracted capacities of the 1,000-MW Sual coal-fired power plant, 345-MW San Roque multipurpose hydro plant and the 1,20- MW Ilijan natural gas power plant.