Chevron may pull out of Tiwi-Makban bidding

After a thorough assessment of its priorities in the power generation business in the Philippines, Chevron Geothermal Power Corp. (formerly Unocal Philippines Inc.) may no longer bid for the 700-megawatt (MW) Tiwi and Makiling-Banahaw (Tiwi-Makban) geothermal assets.

Unocal Philippines, which is also formerly known as Philippine Geothermal Inc. (PGI), and the National Power Corp. (Napocor) operate the Tiwi-Makban geothermal plants.

"Chevron Geothermal will likely pull out from plans of joining the bidding for Tiwi-Makban," industry sources said. They pointed out that Chevron Texaco Corp., the parent company of Chevron Geothermal, may not consider its local geothermal unit as its core business.

"Thus, the company may decide to pull out from the geothermal assets’ auction," the sources said.

Earlier, the Power Sector Assets and Liabilities Management Corp. (PSALM) has identified Chevron Texaco as one of the interested parties in the geothermal assets of Napocor.

Other parties which reportedly signified interested to bid for the geothermal assets include First Gen Corp., CalEnergy, Marubeni Corp. and Korea Electric Power Corp., among others.

Under Republic Act 9136 or the Electric Power Industry Reform Act of 2001, the geothermal assets of Napocor, including the Tiwi and Makban power facilities, will have to be sold as a package. This means the power plants will be disposed together with the steamfields.

At present, the Tiwi-Makban assets carry a geothermal resource sales contract (GRSC) stretching until 2021 with Unocal as a result of Napocor’s settlement agreement with the US firm sealed recently.

The Department of Energy (DOE) said the steam pricing stipulated under the GRSC makes the Tiwi and Makban projects among the lowest cost energy sources in the country.

Aside from Tiwi-Makban, PSALM also lined up in the auction block this quarter other Napocor assets, primarily hydropower plants, including the 300-MW Magat, 100-MW Pantabangan and 12-MW Masiway facilities.