SMC, Aboitiz units to bid out power plant supply contracts

MANILA, Philippines - San Miguel Corp. will bid out up to 1.5 million metric tons worth of its coal requirements for the newly-acquired 1,000-megawatt Sual power plant.

Industry sources said San Miguel Energy Corp. (SMEC), the corporate vehicle used to purchase Sual, wants bidders to submit their offers on or before Oct 15. The delivery of the coal supply is intended to begin next month at the earliest.

SMEC also reportedly wants the contract period to be up to 10 years, the same sources added.

Aboitiz Power Corp., through its unit Therma Luzon Inc., on the other hand, will also start the procurement of the coal requirement for its 700-MW Pagbilao power plant. Therma would need eight panamax shipment of coal from November 2009 to February 2010.

Offers for the Pagbilao coal requirement, according to sources, should be submitted not later than Oct. 8.

Sources said the first shipment should be delivered by the first and second weeks of November.

Last August, SMEC and Therma won in their bid as independent power producer (IPP) administrators for the Sual and Pagbilao facilities, respectively.

Under the IPPA agreement with the Power Sector Assets and Liabilities Management Corp. (PSALM), the winning IPPAs will handle the procurement of the power plant’s fuel requirements.

SMEC offered $1.072 billion for the management and control of Sual’s 1,000 MW contracted capacity.

It was the second consecutive contract won by the San Miguel Group, the largest food and beverage conglomerate in Southeast Asia, as SMEC also successfully concluded negotiations with PSALM for the sale of the 620-MW Limay combined-cycle power plant as the government accepted its $13.5-million offer for the diesel-fired power plant. 

Therma, on the other hand, was declared the highest bidder for Pagbilao coal-fired power plant’s supply contracts with its offer of $691 million.

Aside from procurement of fuels, the winning IPPAs will also manage the contracted capacities in the Sual and Pagbilao power plants. Both power facilities are being operated by Japanese-controlled TeaM Energy under a build-operate-transfer agreement.

The 1,700-MW aggregate contracted capacities of the two power plants represent around 34.7 percent of the contracted capacity of the IPP contracts for Luzon and the Visayas.