Napocor awards coal supply deal to Chinese firms

The National Power Corp. (Napocor) board has awarded two contracts to Chinese firms for the coal supply needs of the Masinloc and Sual power plants.

Napocor vice chairman and Energy Secretary Vincent S. Perez, in a press briefing Wednesday, said the board has given the go signal for Shanxi Coal Import/Export Group Co. and Shenhua Coal Trading Co. to supply the coal requirements for this year of Sual and Masinloc, respectively.

Shanxi and Shenhua were represented by Jibsen Trading Co. Ltd. and Baretech Ltd. during the bidding last month.

Specifically, Shanxi will provide 350,000 MT of steaming coal to the Sual thermal power plant at price of $32 per MT. The contract is worth $10.4 million.

Shenhua, on the other hand, will supply and deliver some 325,000 MT of steaming coal to Masinloc Thermal power plant at $31.85 per MT or a total contract price of $10.35 million.

Napocor president Rogelio Murga said there was a need to award the contract soonest as they are already on the verge of a coal supply shortage.

"We wish to inform the board further that the present critical coal inventory at Sual would necessitate immediate implementation of the proposed Shanxi contract this June 2003," Murga said.

He said the required estimated time of arrival of Masinloc for the first delivery under the proposed Shenhua contract is August 2003.

Last month, Napocor bid out some P5.6 billion worth of annual coal requirements for four of its coal-fired plants.

The auction was made possible after Napocor successfully got a clearance from the Procurement Policy Board (PPB) to open the auction of coal to foreign suppliers.

The PPB is the implementing body for Executive Order No. 40 that was issued by President Arroyo last April 2002. The EO barred foreign suppliers from bidding for the country’s coal requirements in an effort to protect local interests.

The power firm bid out a total of 3.13 million MT of imported coal for four coal plants namely the Napocor-owned 600-megawatt Masinloc and 110-MW Cebu plants, the 1,200-MW Sual and the 700-MW coal facilities of Mirant Energy. As part of the BOT agreement with Napocor’s private power suppliers, the state power firm will provide the fuel for coal plants operated by its IPPs.