Friday, 30 July 2010

SMC eyes nuke power, may tie up with Kepco

by Alena Mae S. Flores
Manila Standard

Diversifying San Miguel Corp. has expressed interest to go into the nuclear power business, a ranking official said Wednesday.

SMC president Ramon Ang said the company was looking at nuclear power as part of the company’s generation portfolio over the long-term period.

Ang said San Miguel might get a joint venture partner for future nuclear power development projects and did not discount the possibility of a tie-up wih Korea Electric Power Corp.

“[We are] willing to partner with any expert in nuclear,” Ang said.

He said San Miguel was also interested in joining the privatization of the mothballed 600-megawatt Bataan Nuclear Power Plant.

“If the government will bid out Bataan [nuclear plant), we will join,” Ang said.

The Aquino government scrapped plans to revive the Bataan nuclear plant and is now looking at the best option to dispose of the asset.

Meanwhile, sources said San Miguel and Kepco had “agreed in principle” to pursue future power-related joint venture projects.

The source said the agreement might include the possible expansion in the capacity of the 1,200-MW Ilijan natural-gas power plant in Batangas province.

“We agreed to pursue future joint venture projects but no specifics,” the source said.

San Miguel manages the contracted capacity of the Ilijan gas plant after winning the auction in April. It will also manage the fuel requirement of the power plant.

San Miguel offered the highest bid of $480 million for the Batangas plant, which is operated by Kepco. San Miguel is now the country’s largest power player.

Kepco has been looking at expanding the Ilijan capacity, depending on the excess gas from the Malampaya project.

Kepco has been conducting talks with Shell Philippines Exploration B.V., operator of the Malampaya project for the excess gas, but no firm agreement has been reached.

Rolando Bacani, Kepco Philippines general manager for business development, earlier said the expansion would also depend on whether other companies will pursue liquefied natural gas facilities.

“Our expansion has been sidelined but if somebody will put up an LNG facility, then that will push us to expand,” he said.

Bacani said the LNG terminal would house imported natural gas that could be used to fuel power plants and the transport services.

Some investors have already expressed interest to put up LNG terminals in Quezon and Bataan.

Kepco officials said the company was prepared to invest over $400 million to expand the capacity of the Ilijan facility.

Kepco has also expressed interest to work with TeaM Energy Corp., a joint venture between Tokyo Electric Power Co. and Marubeni Corp., to expand the Ilijan facility.

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