PNOC works to place Bataan Polyethylene back in operation

The Philippine National Oil Co. (PNOC) is working out a way to put back in operation the Bataan Polyethylene Corp. (BPC), a ranking energy official said.

The official, who requested anonymity, said one of the problems being encountered in the revival of BPC is the availability of reliable power supply.

The source said there are ongoing discussions between the National Power Corp. (Napocor) and a potential source of reliable electricity, Mirant Philippines Corp.

Mirant Philippines is currently operating a substation that could service the need of the petrochemical plant.

But according to the source, there are some geopolitical issues that have to be resolved first before Mirant could enter into such agreement.

It would be recalled that last year, National Petrochemical Co., a subsidiary of Iran’s petrochemical giant NPC International, announced that it is ready to fork out $100 million to resume commercial operations of the Bataan polyethylene plant.

The investment infusion would entitle the Iranian firm 60-percent share in the NPC Alliance Corp. in a share purchase agreement it concluded with the

Metro Alliance Holdings and Equities of the Gatchalian group which retains 40-percent shareholdings.

The source said Mirant apparently indicated that it cannot easily offer the use of its power substation because of the entry of an Iranian partner in the idled BPC facility.

Considering the prevailing unilateral sanctions of the US State Department against Iran, it was learned that American companies cannot do direct business or financial transactions with Iranian entities or investors.

This dilemma, the source said, is the reason why the resumption of the crucial BPC’s operation is being delayed.

Mirant operates the 100-megawatts (MW) substation which is expected to supply the power requirement of the entire petrochemical park in Mariveles, Bataan.

"We certainly want BPC to re-start its operations soon. We are now looking at several options on how we can remedy our dilemma with the substation. We might just build a new one or we‚ll just acquire the substation and compensate Mirant," the energy official said.

BPC was previously owned and operated by a consortium of British Petroleum of the United Kingdom, Petronas of Malaysia and Sumitomo of Japan and local investors.

From the Bataan polyethylene plant‚s current rated capacity of 275,000 tons, this is still lined up for possible expansion by employing the so-called BP innovene gas phase process. This method enables the processing of the polyethylene resin for distribution to local plastic manufacturers

The revival of BPC is also seen to pave the way for the construction of the country’s first naphtha cracker plant.