Meralco, First Gen in talks for power project

MANILA, Philippines -  The power units of the Pangilinan and Lopez groups are negotiating for a joint venture in a natural gas-fired power project in Batangas.

First Gen Corp. president Francis Giles Puno said the company is in talks with Meralco Powergen Corp. for the 300-500 megawatt (MW) San Gabriel power project.

“We have had talks on and off. Nothing definite yet,” Puno said.

Meralco Powergen is the energy generation firm of Manila Electric Co. (Meralco), the country’s largest power distributor controlled by the Manuel V. Pangilinan-led Metro Pacific group.

Metro Powergen general manager Aaron Domingo said the possible deal with First Gen is part of the company’s plans to reach a generation capacity of 2,500 MW from now until 2020.

“As part of our mandate to develop competitive and reliable power we are in constant dialogue with everyone in the market,” he said.

Meralco Powergen’s 600-MW coal-fired power plant in Subic, its first power project targeted for commercial operations in 2016, is hampered by environmental concerns.

First Gen, for its part, is planning to increase its portfolio. In May, it bought out the remaining 40 percent stake of the British Gas Group in First Gas Holdings Corp. for $360 million.

Prior to the sale, 60-percent owner First Gen had a 900-MW attributable capacity from First Gas, which owns and operates the 1,000-MW Sta. Rita combined-cycle natural gas-fired power plant and the 500-MW San Lorenzo natural gas power plant, both in Batangas.

With the full ownership of First Gas, the company can now proceed with the San Gabriel gas-fired power plant.

In 2005, First Gen secured an environmental permit to build the $400-million, 550-MW San Gabriel gas-fired power plant in Batangas.

To date, First Gen and its units have a gross generating capacity of 2,763 MW, of which 1,500 MW is natural gas, 1,129 MW is geothermal and 134 MW is hydropower. It accounts for 18 percent of the country’s total installed power generation capacity.