PNOC-EC to pursue P5-billion coal project in Isabela

MANILA, Philippines - Publicly-listed PNOC-Exploration Corp. is pushing through with its P5-billion coal mine-mouth project in Isabela province after securing an environmental clearance.

In its disclosure to the Philippine Stock Exchange, PNOC-EC said they recently secured an environmental clearance certificate (ECC) from the Department of Environment and Natural Resources (DENR) for the coal-fired power facility.

“The environmental impact statement was submitted to DENR-Environmental Management Bureau and the ECC was issued in February. Studies on the mine-mouth power plant design and costs optimization were conducted,” PNOC-EC said.

PNOC-EC presently holds a coal operating contract covering areas in Cauayan City and the municipalities of Naguilian and Benito Soliven in Isabela.

“The preparation of the terms of reference for the grid impact study, mining plant, front end engineering design and the land acquisition and relocation plan is ongoing,” it said.

After securing the ECC, PNOC-EC will now seek the necessary permits from the local government units. Sources, however, said the issuance of various LGU permits may be delayed due to the elections.

But sources added the company would just focus on other areas such as the conduct of some technical and economic studies on the project. PNOC-EC may also consider entering into joint venture agreements to develop the Isabela coal plant.

“PNOC-EC will need a partner for this because of the cost. San Miguel Corp. offered an unsolicited proposal but there is no development yet,” a source said.

The company earlier expected the project’s construction to commence in the first quarter of 2011. The project is expected to be operational by 2013.

Former PNOC-EC chairman Jacinto Paras earlier said they are in talks with possible investors for the power plant.

“We are currently talking with investors. One is a local company with foreign partners. This company already has an existing coal project in Isabela,” Paras said.

Initially starting out as the Exploration Department of PNOC in April 1975, PNOC- EC was eventually incorporated as a PNOC subsidiary and registered with the Securities and Exchange Commission on April 20, 1976.

PNOC- EC’s shares of stock are 99.78 percent owned by the Philippine government through PNOC, with the remaining 0.22 percent held by public shareholders.

In its early years, PNOC-EC served mainly as a catalyst in petroleum exploration, focusing its activities in frontier onshore areas in Cagayan Valley, Central Luzon and Samar.

In 1994, PNOC EC’s three-megawatt San Antonio gas power plant in Echague, Isabela was commissioned, providing electricity to more than 10,000 households. The operation of SAGPP made PNOC-EC the country’s first producer of indigenous natural gas.

Encouraged by its successes, PNOC-EC started to take bold moves in the 1990s by expanding its operations in the offshore areas of Northern Palawan, Ragay Gulf and offshore Mindoro.

During this period, the company became either a lead operator or a partner in petroleum exploration joint ventures with local and foreign companies.

The company and its partners’ exploration efforts in various petroleum basins eventually led to an oil discovery in Antique (Maniguin-2), a gas discovery in Maguindanao (Tukanakuden-1), two successful gas flows also in Maguindanao (Sultan Barongis 1 and 2), and a well with gas shows in Tarlac (Victoria-3).