Meralco power unit plans investment shift to LNG

Published March 3, 2021, 6:00 AM by Myrna M. Velasco
https://mb.com.ph/2021/03/03/meralco-power-unit-plans-investment-shift-to-lng/

Meralco PowerGen Corporation, the power investment arm of Manila Electric Company (Meralco), is seriously weighing options to shift investment plans into setting up liquefied natural gas (LNG) facilities instead of the previously blueprinted coal-fired power investments.

“We should get into the gas business,” Meralco Chairman Manuel V. Pangilinan told reporters, with him emphasizing that at least three sites are being explored for their planned foray into the gas sector – these are in Atimonan, Quezon which is also the original targeted site for its 1,200-megawatt coal plant project; a site in Batangas or a development in the Zambales-Bataan area.

He indicated that if there would be another round of competitive selection process (CSP) for Meralco’s power supply agreement (PSA) this year, the proposed Atimonan project can be “a candidate to be converted into a gas plant.”

The other strategic site being eyed by the company, according to Pangilinan, is Batangas, and this could be in an area “where one of the existing gas plants is located.”

The alternatives, Pangilinan added, will be to build a new gas complex within Atimonan or the company will pursue a greenfield development in the west coast area of Zambales-Bataan.

The company’s overall venture into the gas business, he said, may also be tied in into the conglomerate’s recent acquisition in Philippine Coastal Storage and Pipeline Corporation, an oil import terminal located at the Subic freeport zone in Zambales.

And if the preferred site shall be in Batangas, the strategic plan is to eventually dovetail it into the prospective commercial development at Recto Bank or Service Contract (SC) 72, an upstream investment of the MVP group which is seen yielding potential for commercial gas discovery; or if the conglomerate will gain success on its targeted acquisition of Shell’s stake in the Malampaya project.

Pangilinan stated the gas investment plans have yet “to be studied,” but he stressed that the study process has to be hastened especially if there will be a new CSP exercise this year.

This LNG investment plunge will be some sort of a ‘renaissance step’ for Meralco, as it originally looked at this venture in the past 5-6 years – along with then prospective partner Osaka Gas Co. Ltd.

For the Atimonan project, MGen President and CEO Rogelio L. Singson said “we will continue to develop the site, in preparation for the next opportunity.”

MGEn recently participated in Meralco’s 20-year PSA auctions for 1,800MW capacity, but Singson noted their company’s offer was “P0.37 per kilowatt hour off the lowest LCOE (levelized cost of electricity)” – which was won by the San Miguel group.

Onward, he emphasized that the power firm will “continue to explore options for our Atimonan site,” of which blueprint was originally anchored on a targeted first ultra super critical coal-fired power development in the country.