First Gen still keen on Pagbilao plant expansion

By Neil Jerome C. Morales (The Philippine Star) | Updated June 3, 2013 - 12:00am

MANILA, Philippines - First Gen Corp., a power generation firm of the Lopez Group, is still interested to take part in the $600-700 million expansion of the Pagbilao coal-fired power plant in Quezon province.

Securing a minority stake in the project will allow renewable energy producer First Gen to gain more capability in building coal power plants, officials said.

“It is still open, we are still interested,” First Gen chairman and CEO Federico Lopez told The STAR.

“We continue to be interested,” First Gen president Francis Giles B. Puno said in a separate interview.

In March last year, TeaM Energy Philippines announced its partnership with the Aboitiz Group to expand the 735-megawatt (MW) Pagbilao coal-fired power plant by another 400 MW at a cost of $600 million to $700 million.

TeaM Energy, a joint venture between Japanese firms Tokyo Electric Power Co. and Marubeni Corp., has given First Gen the rights to take part in the Pagbilao plant’s expansion.

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“It is just a matter of sitting down with them,” Lopez said.

First Gen is waiting for the engineering, procurement and construction contract to be finalized before joining the Pagbilao expansion, Puno said.

“What I think is [TeaM Energy] is negotiating the contract for the construction and supply,” Puno said, adding that the deal is expected to be sealed this year.

First Gen has the option to buy into as much as 30 percent of the expansion project. But since TeaM Energy partnered with the Aboitiz Group, First Gen can own only a third of the TeaM Energy’s 50-percent stake.

The minority stake will work well for First Gen, an expert in renewable energy sector.

Lopez said First Gen does not need to be an active partner in the Pagbilao expansion, allowing the renewable energy firm to focus on its other projects.

Subsidiary First Gas will spend $1.6 billion to increase the output of San Gabriel liquefied natural gas (LNG) plants by another 1,300 MW from 2013 to 2018. Another $1 billion will be required for a LNG receiving and regasification facility.

“It is coal so it is a good way for us to get a bit more expertise,” Puno said.

TeaM Energy earns from and operates the 735-MW Pagbilao coal plant and the 1,200-MW Sual coal plant in Pangasinan.

First Gen subsidiary First Gas owns and operates the 1,000-MW Santa Rita combined-cycle natural gas-fired power plant and the 500-MW San Lorenzo natural gas power plant, both in Batangas.  source