PSALM declares Shell, Phoenix Petroleum as fuel supply winners

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has formally declared Phoenix Petroleum Philippines, Inc. and Pilipinas Shell Petroleum Corporation as winning bidders in the R2.28-billion fuel procurements for the Malaya thermal and Ilijan gas-fired power plants.

These two oil firms submitted the ‘lowest bids’ in a tendering process carried out by PSALM last month on these specified fuel contracts. They were subsequently served ‘notices of award’ on the mandated fuel deliveries.

“Shell and Phoenix passed the post-qualification process that PSALM conducted that determined the existence, authenticity and sufficiency of the eligibility and technical documents they submitted,” the government-owned firm said.

Phoenix Petroleum won the bids the diesel and industrial fuel oil requirements of Malaya plant; while Shell cornered the fuel supply deal for the Ilijan plant.

For diesel oil that will be delivered to the Malaya plant, the winning tender submitted by Phoenix Petroleum was at R47.701 million, comparatively lower than the R51.2 million approved budget cost set by PSALM for the fuel purchase.

The Uy-led oil company had narrowly beaten other bidders like Petron Corporation, Pilipinas Shell, Seaoil Philippines and Petrotrade Philippines, Inc. The contract entails delivery of 1.4 million liters of diesel fuel to the Malaya plant.

On contract for the supply and delivery of 42 million liters of industrial fuel oil to the Malaya thermal facility, Phoenix Petroleum similarly had the lowest offer of R1.138 billion; vis-à-vis the bids of Shell, Petrotrade and SL Harbor Bulk Terminal Corporation. That bid cost was manifestly lower than PSALM’s approved budget cost of R1.186 billion for that specific fuel procurement.

For the Ilijan plant, Shell’s winning tender was at R961.164 million against Phoenix Petroleum’s bid of R982.384 million.

The approved budget cost for this purchase had been pegged at R1.042 billion for 30 million liters of diesel oil.

Scheduled deliveries of the procured fuel to the electric generating facilities will be for calendar year 2018, according to the bidding terms of reference set out by PSALM.

The state-run company assumes fuel risk for the Ilijan plant which is still under a build-operate-transfer (BOT) contract with Korea Electric Power Corporation and its capacity under independent power producer administrator (IPPA) arrangement with South Premiere Power Corporation of the San Miguel group. On the other, PSALM takes full responsibility over the Malaya plant as this asset remains under its ownership.

The Ilijan plant generally runs on gas as its fuel for electricity generation, but it often shifts to diesel either at start-up phase of its operations following a downtime schedule; or when the Malampaya gas production facility goes on maintenance shutdown.