Aboitiz eyes tie-up with TeaM Energy for Pagbilao expansion

MANILA, Philippines - Aboitiz Power Corp. (APC) said it is willing to partner with TeaM Energy Corp. for the expansion of the 735- megawatt (MW) Pagbilao coal plant in Quezon.

APC senior vice president Luis Miguel Aboitiz said they are looking at the possibility of teaming up with TeaM Energy for the project.

“Yes, we may consider that, but right now we have not talked to them,” Aboitiz said.

Therma Luzon Inc, a subsidiary of APC, won as the independent power producer (IPP) administrator of the contracted capacity of the Pagbilao coal plant with its $691 million bid. As IPPA of Pagbilao, Therma Luzon will own the plant after 25 years.

A consortium of Tokyo Electric Power Co. and Marubeni Corp. of Japan , TeaM Energy operates the Pagbilao coal plant under a build-operate-transfer (BOT) agreement with the government.

Tepco and Marubeni acquired the assets of Mirant Corp. in the Philippines in 2007, which included the Pagbilao and 1,200-MW Sual coal plants.

TeaM Energy president Frederico Puno earlier said they intend to expand the capacity of the Pagbilao plant by another 350 MW.

Puno said TeaM Energy previously had the option to expand the capacity of the plants as state-owned National Power Corp. is not allowed anymore to build new power plants under the Electric Power Industry Reform Act of 2001.

The TeaM Energy official said they have yet to discuss future plans for Pagbilao with APC.

Puno said they are willing to enter into a joint venture agreement for the power plants’ expansion.

“It’s one of the things we have to discuss. Right now they will be the eventual owner. So I guess they have the first crack at any expansion since they will own the plant. Before we could do the expansion because Napocor under EPIRA is not allowed to build anymore new power plants, so we had that option to expand. But even if we expand it will have to be a merchant plant and we have to sell it somewhere else as Napocor also is not allowed to enter into any new contract. But now with the IPP administrator coming in – who is the eventual owner – I guess any expansion will be their option,” he said.

“But we can also discuss with them if they want – we can go on a joint venture basis – because if not we’ll have a problem because if, we do it ourselves we have to enter in a contract with them for joint facility utilization (i.e. jetty and other common facilities) – so I think going into a joint nature with them is much better, he added.”