Consunji-led Semirara sees opportunities in LNG sector

BY LENIE LECTURA – MAY 3, 2023
from Business Mirror

CONSUNJI-led Semirara Mining and Power Corp. (SMPC) is joining the liquefied natural gas (LNG) bandwagon, saying this would be a “good business opportunity” for the listed integrated energy company.

Among the company’s plans 10 years from now include an expansion of its power projects and “maybe even shift to LNG if and when situation arises that makes this shift a good business opportunity,” said SMPC Chairman Isidro Consunji during the company’s stockholders’ meeting held Tuesday.

He said the Calaca coal plant in Batangas could be an “ideal” location for the planned LNG investment.

“The Calaca location is ideal for LNG as well as coal. The question is really just an issue of business viability but physically and technically, there is no reason why SMPC cannot go to LNG,” Consunji said.

SMPC is the country’s largest domestic coal producer. It supplies affordable fuel to power plants, cement factories and other industrial facilities across the Philippines.

Under its power business, SEM-Calaca Power Corp. owns the 2×300-MW Calaca coal-fired power plant in Batangas which it acquired from the government in 2009 with its bid of $362 million. Southwest Luzon Power Generation Corp. runs the 2×150-MW coal power facility also in the same area.

The shift to LNG is among the four goals that SMPC intends to pursue in the next decade. SMPC said it would continue to explore alternative revenue streams, such as expanding its power generation capacity and pursuing new mining opportunities beyond Semirara Island.

“First of all, we hope the DOE (Department of Energy) will favorably consider our legal position on the adjustment of the terms of our coal operating contract. Secondly, we believe that there are opportunities in mining outside of Semirara Island and we can probably participate in these mining opportunities.

Lastly, we expect that we’d be able to look at other businesses, assuming our financial state enable us to diversify to other businesses,” said Consunji.

To manage market risks, SMPC is enhancing its power generation capabilities while maintaining low fuel costs. “Our adaptability in the face of these ongoing challenges will prove crucial to the next phase of our company’s journey.”

SMPC is not abandoning its coal business despite it being the least desirable of the major fossil fuels when it comes to the environmental aspects of energy consumption.

“Given that coal is the primary product of SMPC, it is difficult for us to exit coal. However, our approach is a carbon mitigating plan, which is to offset the carbon emission of our coal and power plants with carbon credits and other mining activities and reforestation that will mitigate a lot of these carbon being emitted by our existing business.”