SMC finalizing sale of Limay power plant

By Donnabelle L. Gatdula (The Philippine Star) Updated October 03, 2011 12:00 AM


MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC) is now finalizing the sale of its 620-megawatt (MW) Limay diesel-fired power plant to a group of investors.


“Yes, we are selling it right now. We are talking and will finalize the sale soon,” SMC president Ramon Ang said.


Ang, who declined to reveal the identity of the buyer, said they have decided to dispose of the power plant as it is more “viable” to sell it and just build a new one.


“We will just build a greenfield (gas-run) power plant,” he said.


Sources said it would be prudent for SMC to dispose some of its power assets to manage its market capitalization.


Early this year, Ang told reporters that SMC may spend about $1 billion for the conversion and expansion of the Limay power facility into a liquefied natural gas (LNG) facility.


Ang also said that a study on this planned conversion was being completed.


According to sources, the sale of the Limay plant was an offshoot of that study, which indicated that it is best for the company to sell the power plant and just build a new gas-run facility if necessary.


In August last year, there were talks that state-owned PNOC Exploration Corp. and SMC may enter a joint venture for the conversion of Limay.


The Limay plant uses diesel as fuel and government declared it as a must-run unit at the height of the brownouts that hit Luzon in late February. As a must-run unit, the Limay plant commanded a higher generation price at the wholesale electricity spot market.