RP Energy may convert coal plant to LNG facility

By Lenie Lectura – January 21, 2019
from Business Mirror

THE planned 2 x 300 megawatt(MW) circulating-fluidized bed (CFB) coal-fired power plant of Redondo Peninsula Energy Inc. (RP Energy) in Subic, Zambales, may be converted to a liquefied natural gas (LNG) facility.

This is one of the options being considered by the power-generation arm of the Manila Electric Co. (Meralco) whose unit, Meralco PowerGen Corp. (MGen), is a stakeholder of RP Energy.

MGen President Rogelio Singson said this option is being discussed with “in-house experts” and that a decision on what technology to pursue would be ready before the first half of year ends.

“We should be making a decision within the first half of this year regarding what to do next. We would have determined the technology and EPC (engineering, procurement and construction). There are new technologies. It might no longer be CFB. We are also considering LNG,” Singson said.

If the coal-power plant project would be converted to LNG, Singson said the capacity would “depend on economics.”

“It might not be that big, depending on economics. In general, we’re saying we’re open to changing the technology from original 2×300-megawatt (MW) CFB,” he said.

Separately, Meralco Chairman Manuel V. Pangilinan said stakeholders have yet to be informed pending results of ongoing studies.

“We have not raised it with them yet; we’re still doing our studies. Hopefully, within the year. We need to know whether that Subic plant is a go or a no go, whatever fuel source we eventually adopt,” Pangilinan said.

RP Energy Inc. is a partnership among Meralco, Aboitiz Power Corp. and Taiwan Cogeneration Corp. through their respective subsidiaries.

AboitizPower COO Emmanuel Rubio said recently RP Energy has cancelled the  notice to proceed issued to the EPC contractor, Doosan Heavy Industries & Construction Co. Ltd., and Azul Torre Construction Inc.

Among others, Rubio cited “instability in one of the slopes” and “a construction issue, something that was not foreseen” by the project proponent.

Nonetheless, Rubio said, Meralco is on top of the situation. “At the moment, it’s Meralco looking at a way to manage the movement.”

Singson said the stability of the site remains to be a challenge aside from the power supply agreement (PSA) that is pending before the Energy Regulatory Commission (ERC).

RP Energy signed in April 2016 a 20-year PSA with Meralco for a contracted capacity of 225 MW. A separate PSA for the balance of the 75 MW was also signed within the same year. Both PSAs remain pending with ERC.

Without an ERC-approved PSA, the EPC contractor refused to honor the extended EPC contract. It then presented to Meralco a much-higher EPC cost, citing delays in the PSA approval.

“Without the PSA, we have no recourse, but to call them off and say we will now open our options not just with the Korean contractor. We’re now looking at other options. It might be new technology,” he said.

“In the meantime, we are holding off our site. We’re saying let this rainy season pass and see the stability of the site. When the Koreans started, there was heavy rainfall. That also caused some concern from the Koreans,” Singson said.

Pangilinan said an ongoing study will also determine how the gas would be transported.

“Well, if we do convert into gas, it will be a customer of the terminal. The question is how do we transport the gas from the terminal in Batangas? We need to have a dedicated ship to the gas plant in Subic. If the FSRU [floating storage and regasification unit] is in Batangas, then how do you transport gas from Batangas to Subic, and what is the cost building a pipeline? I think we’re studying it, not really sure if it’s feasible,” Singson said.

“Now, if you build a big gas complex that is a complement to the Batangas situation—3,000-MW capacity in Batangas then that justifies a terminal,” Pangilinan said.