Ilijan plant to open before June deadline, says Keilco

Kepco-Ilijan Corp. (Keilco) is optimistic that it could meet the June deadline for the commercial opening of the 1,200 MW-Ilijan gas-fired power plant, a company official said.

"We came here to contribute to the Philippine economy and doing our best to meet the expectations," Keilco president Choi Byung-Chul said.

The $800-million Ilijan plant was supposed to commercially operate at the start of the year, but some technical problems forced the proponents to push back the schedule.

The power plant is a project of Keilco, National Power Corp. (Napocor) and other power firms which include Mitsubishi Corp., Southern Energy of the US and Kyushu Electric of Japan.

Choi said they are currently negotiating with the Napocor on the $400,000 a day penalty imposed by the state-owned power firm for the delay of the Ilijan natural-gas combined cycle power plant’s commercial operation.

"Things are being negotiated with the Napocor and the Department of Energy (DOE)," Choi said, refusing to comment on the delay of the project and the penalty apparently being imposed on them by Napocor.

Energy Secretary Vincent S. Perez said the negotiation is necessary to settle the issue once and for all.

"They are way behind schedule. They (Napocor) are negotiating for the liquidated damages that they are incurring of $400,000 a day," Perez said.

Perez said it is also possible that the contractor will be penalized. The United Engineers International Inc., Raytheon-Ebasco Overseas Ltd. and Mitsubishi Heavy Industries were hired by Keilco to build the power plant.

The Ilijan project is one of the downstream power plants that would be fueled by the Malampaya natural gas. The National Government is expected to earn P28 billion over the 25-year life of the natural gas project.

Gas from Malampaya, enough to fire a 3,000-MW power plant for 20 years, will be sold to Santa Rita (1,000 MW), San Lorenzo (500 MW) and Ilijan (1,200 MW) power plants in Batangas. Of the three, only Santa Rita is operating commercially having opened commercially in October last year.