TeaM Energy looks at expanding Sual coal-fired facility

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THURSDAY, 21 JULY 2011 19:55 PAUL ANTHONY A. ISLA / REPORTER

TEAM Energy Corp. (TeaM Energy)— the joint venture between Tokyo Electric Power Corp. (Tepco) and Marubeni Corp.—is looking at expanding the generating capacity of its 1,200-megawatt (MW) coal-fired power plant in Sual, Pangasinan.

The power plant is owned and operated by TeaM Energy although San Miguel Global Power Holdings Corp. is the independent power producer administrator (IPPA) that manages the facility’s contracted capacity.

Federico Puno, TeaM Energy president, said the company will conduct a feasibility study to determine the viability of expanding the Sual by another 400 MW or 600 MW. “Even as San Miguel indicated to prioritize developing its coal mine potential in Mindanao, we will still proceed with the feasibility study for the Sual expansion project,” he added.

Once completed by September this year, Puno said they will approach and present the results of the study to San Miguel.

Included in the feasibility study is a grid impact review that will incorporate AES Philippines’ plans to also expand its 600-MW Masinloc coal-fired power plant in Zambales. “The timing of the expansion project also in view of AES’s plan will be part of our feasibility study,” he said. 

Puno said they have also talked with IPPA Therma Luzon Inc. about the planned expansion of the 735-MW Pagbilao coal-fired facility in Quezon.

Therma Luzon—a wholly owned subsidiary of Aboitiz Power Corp.—manages the contracted capacity of the Pagbilao. “We have not agreed on expanding the Pagbilao yet, but we're already discussing the details of the planned expansion with them," he added.

Puno earlier said they plan to expand the Pagbilao plant in Quezon and Sual facility in Pangasinan.

Expanding the Pagbilao capacity could cost around $500 million, while the Sual expansion is expected to cost $1 billion.

“We want to expand Sual and Pagbilao to take advantage of the common facilities such as the pier and the water treatment plant. Unlike any greenfield project that will cost around $1.5 to $2.5 million per megawatt to put up, the expansion of the Pagbilao and Sual will only cost us $1 million to $1.5 million, which gives us advantage,” he said. Puno said Tepco will conduct the feasibility studies for the expansion of the two power plants, while actual construction will depend on the results of the feasibility study that will include forecast market demand starting 2014.

The TeaM energy executive earlier said it would be hard for the company to undertake the expansion projects on its own.  “If we do it ourselves we have to enter in a contract for joint facility utilization for the jetty and other common facilities, but going into joint venture is much better.”              

The Sual and Pagbilao are both operated by TeaM Energy under build-operate-transfer contracts with the National Power Corp. (Napocor) which will expire in 2024 and 2025, respectively.

At the end of the cooperation period between TeaM Energy and Napocor, the Sual and Pagbilao facilities will be turned over to its IPPAs—in this case, San Miguel Global Power Holdings Corp. and AboitizPower-led Therma Luzon Inc., respectively.

TeaM Energy is a partnership between Tepco and Marubeni Corp. that acquired the assets of Mirant Corp. in the Philippines in 2007, which included the Pagbilao and Sual plants and a 20-percent stake in the Ilijan gas project operated by Korea Electric Power Co.