San Miguel, government mull tieup for nat-gas conversion project

MANILA, Philippines - The government is exploring the possibility of a partnership with diversifying conglomerate San Miguel Corp. (SMC) for a natural gas conversion project.

PNOC-Exploration Corp. (PNOC-EC) president Rafael del Pilar said they are in talks with SMC for the conversion of the latter’s 620-megawatt Limay diesel power plant into a natural gas facility.

Del Pilar said this potential joint undertaking will complement the state-run firm’s plan to build a natural gas pipeline by using the Limay facility as an anchor load to justify the construction of the pipeline.

According to the PNOC-EC official, they hope to seal an agreement with the SMC group within the year.

“There is no definite timetable but we hope to start the negotiations anytime this year,” Del Pilar said.

Earlier, the Department of Energy (DOE) raised the possibility of converting the Limay and Sucat diesel-fired power plants into liquefied natural gas (LNG)-run facilities.

Based on the Philippine Energy Plan (PEP) for the period 2009 to 2030, it was pointed out that there is a need to promote the establishment of an LNG import terminal hub in the country.

Under the infrastructure development program of the PEP, it is expected that the government will conduct a feasibility study for the LNG terminal to supply natural gas requirements not only in Luzon but also in the Visayas and Mindanao.

It is envisioned that the proposed LNG terminal hub will be located in Pagbilao, Quezon by 2013. An LNG terminal is expected to be built in Bataan in 2015.

There is also a plan to put up a gas pipeline loop in Luzon starting with a 100-kilometer Batangas-Manila gas pipeline to support the development of these LNG-run facilities.