In an interview, Gatchalian — a major shareholder in BPC — said the BPC has been recommissioned at a cost of $20 million and is ready to operate.
Unfortunately, he said the plant cannot resume operation because Mirant refuses to provide the plant with power, allegedly since the project will be controlled by Iranian investors.
Iran’s National Power Co. International is acquiring 60 percent of BPC, while Gatchalian, through his Metro Alliance Group, will hold 40 percent.
Gatchalian complained the problem has turned political, spawned by the long-standing conflict between the US and Iran. Mirant, being a US firm, allegedly refuses to deal with any firm that has Iranian investments.
However, Gatchalian pointed out, the buy-in by NPC International has not been concluded specifically because of the power problem.
The Iranian payment is already deposited in a Philippine bank, awaiting resolution of the power problem.
Gatchalian said while BPC can acquire power directly from the state-run National Power Corp., it would be costly since it must put up its own sub-station which would cost between $4 million to $10 million.
BPC is hoping to resolve the power problem so that it can resume operation by the first quarter of 2007 with an initial production capacity of 270,000 metric tons per year. BPC’s maximum production capacity is at 400,000 MT a year all for domestic consumption.
The Metro Alliance Group acquired in 2005 the shares of British Petroleum (38.5 percent), Malaysia’s Petronas (38.5 percent) and Japan’s Sumitomo Corp.(six percent) in BPC. Gatchalian is the majority shareholder of Metro Alliance.
BPC started operating in 2000 with a capacity of 200,000 MT.
Unfortunately, because of the global glut in petrochemical resin production, the local petrochemical players have been under a constant struggle to remain afloat.
The local petrochemical industry has been beleaguered that it had asked the government to delay a planned tariff reduction under the ASEAN Free Trade Area - Common Effective Preferential Tariff (AFTA-CEPT).
Plans to put up a naphtha cracker that would fully integrate the local petrochemical industry have remained on paper following the difficulties faced by the local petrochemical players and foreign proponents.