Published
July 25, 2018, 10:00 PM By Myrna M. Velasco
The banked gas sale of
state-run Philippine National Oil Company (PNOC) has attracted just one
qualified bid, according to a top-level executive of the firm.
It was gathered that it
was just First Gen Corporation of the Lopez Group that submitted an offer on
bid submission deadline last Monday (July 23).
When asked on this,
PNOC President and CEO Reuben Lista has not specified the company, but he just
affirmed that there was “only one complying bid.”
Nevertheless, he
pointed out that this “needs Board approval because of the nature,” referring
to the lone tender. No details were also given on the bid price of the
interested company.
In previous biddings,
PNOC failed to divest its banked gas because the offers it cornered were way
below the price reference, which is the Ilijan gas price.
In the last auction in
2015, Ilijan price had been pegged at US$6.67 per gigajoule, but the best offer
that the state-run firm got had just been at US$3.50 per gigajoule.
Lista previously
apprised media that in the sale of the banked gas, PNOC cannot go lower than
the Ilijan price, because doing so will be tantamount to violation of an
existing PNOC Board Memorandum on that particular matter.
To the company chief
executive, that memorandum has to be amended first – with the concurrence and
approval of the Board – before PNOC can accept any tender deemed lower than
Ilijan’s gas cost.
The PNOC previously
crunched numbers that it would be able to fetch as much as US$700 million from
the banked gas divestiture if benchmarked on the Ilijan price.
However, if the intent
of the buyer is to procure it at a lower cost so it can also bring down
electricity rates for consumers, then that is a concern that the PNOC Board
would have to seriously weigh.
For instance, in the
case of First Gen, it has the most number of gas-fired power fleets that can
utilize the banked gas. And since generation charges are pass-through costs,
the cheaper gas it can procure may also redound to lower electricity bills for
consumers.
In the investment plans
of PNOC for liquefied natural gas (LNG) import terminal and associated
facilities like power plants and gas distribution infrastructure, the company
intended to “equitize” its banked gas – and make such as “part of the package”
as to whoever will eventually emerge as its strategic partner.
A formal announcement
has yet to be made as to which company it had finally chosen to be its partner
in the LNG ventures.
No comments:
Post a Comment