SMC energy unit may join First Gen’s LNG terminal venture
It will likely be a “marriage” of two power sector giants, as the energy investment arm of San Miguel Corporation (SMC) is opening its doors to a possible joint venture deal with First Gen Corporation of the Lopez Group on the latter’s US$1.0billion liquefied natural gas (LNG) import handling facility.
SMC President Ramon S. Ang told reporters that he is keen to be invited by First Gen to take equity and be part of the development of its proposed 5.0 million tons per annum (mtpa) onshore LNG terminal.
“We can do it (LNG terminal) or we can partner with First Gen,” he said; while emphasizing that he is being prompted on this investment decision as they now prefer to retain the 1,200-megawatt Ilijan plant as a gas-fed facility rather than having it converted into a dieselfired generating asset.
“The Ilijan plant, we will retain as gas and we may even expand that… it will be an easy decision for us to expand it by additional 1,800 megawatts, so total capacity will reach 3,000,” Ang said.
He further emphasized “we have a lot of options, and First Gen and San Miguel are quite close so there’s no problem if they will put up the terminal or we will join them.”
The SMC top executive admitted though that “formal invitation” for potential partnership has yet to spring forth from First Gen, although at this stage, Ang qualifies that “it’s not really a problem if they will put up the terminal on their own or it will be a joint venture with us. We can always buy (gas) from them.”
He stressed the 3,000MW capacity plan for gas-fired generation in San Miguel’s portfolio is prudently considered “because that is the level of capacity that would be viable for floating terminals or regas -- for it to be economical.”
On propounded capacity expansion, Ang indicated that even siting has already been propped for it “because we already bought properties close to the existing site of the Ilijan plant.”
When asked on equity level that will be acceptable to San Miguel on the LNG project, Ang noted that he is “amenable to any percentage”; but he averred discussions must kick off first between relevant parties.
First Gen President Francis Giles B. Puno conveyed to reporters last week that in planning the capacity of the LNG terminal, they also factored in the gas needs of the Ilijan plant, hence, that was taken as cue for San Miguel to think about pursuing a JV deal instead with the proponent.