MANILA, Philippines – A unit of First Gen Corporation, a power generation company headed by the Lopez family, has made an agreement with the Manila Electric Company, or better known as Meralco, to supply baseload power from its power plant in San Gabriel, Batangas.
In the company’s report to the Philippine Stock Exchange (PSE), First Gen mentioned that First NatGas Power Corporation, a subsidiary solely owned by First Gen, made a power supply agreement (PSA) with Meralco for the purchase and sale of roughly 414-megawatt baseload capacity.
First Gen mentioned that through the agreement, Meralco gains reasonably priced baseload power since the all-in tariff of San Gabriel at a capacity factor of 80 percent is 3.77 pesos per kWh.
According to the company, the power supply would come from the already built and currently functional 414-megawatt San Gabriel natural gas combined-cycle power plant in the First Gen Clean Energy Complex in Batangas City.
Under the PSA conditions, power supplied from San Gabriel is actually up for immediate purchase by Meralco. However, electricity sale will only kick off once approved by the Energy Regulatory Commission (ERC).
Unless otherwise both parties extend it, the PSA’s term is for 6 years, or up to February 23, 2024, utilizing gas coming from the Malampaya gas field.
The agreement for the Malampaya gas-to-power (GTP) project off the coast of Palawan ends in 2024.
Nevertheless, Shell Philippines Exploration B.V., which operates the Malampaya having an interest of 45 percent, mentioned that the project could still supply gas past the contract expiration in 2024, or till 2027 to 2029. However, it has to settle its issue regarding tax with the Commission on Audit (COA), which noted the project’s tax deficiency of 53.14 billion pesos in total.
In the meantime, the Department of Energy (DOE) is promoting the liquefied natural gas (LNG) integrated terminal development to advance the Philippines as a trans-shipment and trading hub in the Asia-Pacific region.
It has released the Philippine Downstream Natural Gas Regulation (PDNGR), which explains the governing rules and regulations of the downstream natural gas sector to establish a market as well as acquire energy sustainability and security.
The DOE has gained the interest of four groups which include Cleanway and Resiro, Tokyo Gas, First Gen Corporation, and China National Offshore Oil Company (CNOOC).
The Philippine National Oil Company (PNOC), on the other hand, was also assigned to set an LNG integrated hub with liquefaction, storage, distribution, and regasification facility and a 200-megawatt power plant reserve initial capacity.
Latest posts by Stock Signals Philippines (see all)
- Philippine Stock Market Wrap-up Report: October 22, 2018 - October 22, 2018
- Petron Corporation (PCOR): Good Company, Bad Stock? - October 22, 2018
- Philippine Stock Market Wrap-up Report: October 19, 2018 - October 20, 2018