CalEnergy to decide on extension of contracts with EDC

California Energy International Services Inc. (CalEnergy) will decide by mid-December this year if it extend its contracts with PNOC-Energy Development Corp. (EDC) or allow a buyout.

"They (CalEnergy oficials) said they will study what we have proposed such as the extension and or a buyout of the contract of EDC with them," EDC chairman and president Sergio Apostol said, in an interview.

A CalEnergy official earlier said they are looking very closely at the proposal to extend the contracts with EDC. "That’s an option that we would like to look at to resolve the issue," CalEnergy vice president Robert G. Eugenio said, in an interview with The STAR.

Eurgenio, however, said the proposal for a buyout may not be feasible. "We are not inclined to do that (sell the contracts to EDC)," he said.

EDC has commissioned ABN-Amro and Credit Suisse First Boston to serve as the third party in the possible negotiations between the two power firms.

CalEnergy and EDC are in a midst of arbitration processes involving two build-operate-transfer (BOT) contracts for Malitbog and Mahanagdong geothermal power plants in the province of Leyte.

The two firms are disputing a discrepancy in the minimum required steam that EDC should have been delivering to CalEnergy. EDC supplies steam to CalEnergy-run power plants. Over a five-year period, the contested power has reached 10 MW. – Donnabelle Gatdula