PNOC unit in talks with foreign power firms over $120-M wind farm project

The PNOC-Energy Development Corp., a subsidiary of government-owned Philippine National Oil Co. (PNOC), has started talks with two foreign power firms for a feasibility study for the second and third phases of its $120-million wind farm project.

Sergio Apostol, PNOC-EDC chairman and chief executive officer, said they are tapping NEG Micon of Denmark and Nordik Co. of Sweden to undertake the feasibility study on the next two phases of the project.

The PNOC-EDC is pursuing plans to continue the next two phases of the wind farm project after it started preparations for the pre-qualification and bidding stages of the Phase 1 of the project.

Phase 1 of the project entails a cost of $55 million or approximately P2.9 billion while the remaining stages will require only about $36 to $40 million for each phase.

Apostol said the bidding terms and conditions for phase 1 will need the approval of the Japan Bank for International Cooperation (JBIC), the financial institution that will provide the funding for the first stage of the 40-MW wind farm project in Burgos, Ilocos Norte.

This will be part of a special yen loan package of JBIC for the Philippine government, JBIC, however, is willing to extend up to 85 percent of the total project cost with the remaining amount to be shouldered by PNOC-EDC.

The company expects a number of Japanese and European firms to participate in the bidding.

Earlier, Mitsubishi Corp. and Kinden Corp. of Japan, NEG Micon, Vestas and Nordex of Denmark and Ecotecnia of Spain expressed interest in the project.

PNOC-EDC is optimistic that it could complete the bidding process by April this year so construction could start early next year.

The wind project is being pursued in line with PNOC-EDC’s diversification thrust. The company is known for its geothermal operations as its core business. "We have the capability to branch out to other forms of energy especially those that are environment-friendly," Apostol said.

Meanwhile, the company is also pursuing other international businesses such as signing drilling contracts with other countries.

Recently, PNOC-EDC bagged a $4.2-million third drilling contract with Lihir Management Co. (LMC) in Papua New Guinea for the drilling of at least 16 geothermal wells.

The company has already drilled 33 wells for Lihir since 1999, under two integrated drilling service contracts with a total cost of $14.4 million.

Apostol said the new deal with Lihir signifies the confidence of the international market in the Filipino expertise regarding geothermal generation.

The Philippines, so far, is the second largest producer of geothermal power next to the United States.