Petron buying affiliate’s power facility

by Myrna Velasco – September 16, 2016

from Manila Bulletin

Leading oil firm Petron Corporation will be acquiring from affiliate firm the 140-megawatt power facility sited within its Limay refinery premises.

The power plant that has been feeding its electricity requirements is currently owned by SMC Powergen, Inc., a subsidiary of its parent firm San Miguel Corporation (SMC).

In a disclosure to the Philippine Stock Exchange (PSE), Petron noted that its Executive Committee had granted it “the authority to negotiate, enter into and conclude with SMC Powergen, Inc. the relevant definitive agreements for the purchase and acquisition by the company of the 140MW solid fuel-fired power plant.”

The oil firm similarly indicated that it has been given the go-signal “to secure and avail of credit facility agreements to fund the proposed acquisition of the power plant.”

No details as to how negotiations have been proceeding at this time, but Petron said “the company shall make appropriate disclosures to the Exchange in the event the definitive agreements relating to the contemplated acquisition of the power plant and the availment of the credit facilities are concluded with the counterparties.”

It has to be noted that Petron decided to set up its own power generation facility in the past 4-5 years to ensure then that its refinery would not be affected by portended power crisis in the Luzon grid. The facility was completed around 2013.

But the since the power plant’s capacity had been bigger than its refinery’s demand, the company has also been wheeling part of its generation to the grid.

Company executives have sounded off then that electricity sales to the grid had been helping the company shore up its revenue stream.

As designed, the plant has four generating units for total installed capacity of 140 megawatts; and could also produce 800 metric tons of steam per hour.

Earlier plans also called for the expansion of the power facility by up to 216MW capacity – with demand expected going up with the Petron refinery’s upgrade.