Southern Energy buys 20% stake in Ilijan

Southern Energy Philippines is poised to acquire today a 20-percent interest in the 1,250-megawatt Ilijan natural gas-fired power project under construction in Batangas for about $35 million.

The power station, to be fueled by natural gas, will use the latest combined-cycle technology and advanced emission-control equipment to maximize efficiency and environmental performance. The plant will provide electricity to the National Power Corp. (Napocor) under a 20-year agreement that gives Napocor rights to 1,200 megawatts of the station’s capacity.

Southern Energy Philippines’ partners in ownership of the project are Korea Electric Power, with a 51-percent interest; Mitsubishi, with 21 percent; and Kyushu Electric Corp., with eight percent. The plant, built under a "build-own-transfer" agreement, will transfer to the ownership of Napocor after 20 years.

Natural gas for the plant will come from the Malampaya gas field in the Palawan province of the Philippines – the first natural gas find of commercial value in the country. The gas field, with sufficient reserves to fuel up to 3,000 megawatts of electric generating capacity for the next 25 years, is being developed by a consortium of Shell, Texaco and the Philippine National Oil Co.

A significant component of the Philippine government’s strategy to use local, competitive and environment-friendly sources of energy, the new plant is expected to help the country lessen its dependence on imported crude oil being used to run expensive oil-fired power plants.

The power plant is being constructed by a consortium of United Engineers International, Inc., Raytheon-Ebasco Overseas Ltd., and Mitsubishi Heavy Industries. Construction began in March 1999 and is expected to be completed by early 2002.

Southern Energy Philippines, a subsidiary of Southern Energy Asia-Pacific Ltd., currently operates more than 2,300 megawatts of electric generation capacity in the Philippines, making it the largest private producer of electricity in the nation.

Atlanta-based Southern Energy Inc. is a global independent power producer and a leading energy marketing and risk-management company, with extensive operations in North America, Europe and Asia. Southern Energy, Inc. owns more than 12,600 megawatts of electric generating capacity around the world, including about 7,400 megawatts in the United States, with another 11,200 megawatts under advanced development. Southern Energy is 80-percent owned by Southern Co.