San Miguel offers Ilijan plant if Malampaya gas dries up
This was expressed by Ramon Ang, president and chief operating officer of San Miguel Corp. (SMC), SPPC’s parent.
“So, if there is any supply shortage in the future, we can utilize [the SPPC],” Ang said.
The Ilijan power facility is a dual-fuel power station in Batangas City. It is primarily a natural-gas plant and uses distillate oil as a secondary backup fuel source. The plant is designed to draw natural gas from the Malampaya gas field, which is expected to be depleted sometime between 2024 and 2029.
Malampaya also fuels other gas plants, such as the 1,000-MW Santa Rita, the 500-MW San Lorenzo, the 1,200-MW Ilijan and the 97-MW Avion plant. These power plants supply an aggregate capacity of 3,211 MW to the Luzon grid, 2,565 MW of which is supplied to the franchise area of the Manila Electric Co.
Ang said the Ilijan plant would probably operate at the same capacity if and when it is converted to a peaking plant, which operates during peak hours when there is high demand for electricity.
Natural-gas plants, meanwhile, are common examples of midmerit plants that supply the gap between base-load and peaking plants. A base-load power plant provides continuous supply of electricity throughout the year with some minimum power-generation requirement.
SMC claims the SPPC earlier paid the Power Sector Assets and Liabilities Management Corp. (PSALM) $4.8 billion in various fees as of October this year.
“The records will show that we have paid more than enough, and we religiously abide by our contractual obligation as administrator of Ilijan. PSALM is, in fact, net cash positive from their contract with us, having already gained P30 billion as of August 2017,” Ang added.
By the time the administration agreement with PSALM expires in 2022, SMC would have paid PSALM a total of P384 billion, or about $7.68 billion, for the 20-year-old power plant. SMCs SPPC earlier filed a case against PSALM’s after the latter illegally terminated its IPPA and treated it as an administrator in default.
SPPC said PSALM’s willful breach of contract was the result of a flawed interpretation of certain provisions related to its generation payments under the IPPA agreement.
