TeaM Energy sets $1.5-B expansion

MANILA, Philippines - TeaM Energy Corp., a partnership between Japanese firms Tokyo Electric Power Co. and Marubeni Corp., is firming up expansion plans for its two facilities in the Philippines at a cost of about $1.5 billion, the company’s top executive said.

In a press briefing, TeaM Energy president Federico Puno said they are in talks with San Miguel Corp. (SMC) for the expansion of the 1,218-megawatt (MW) Sual coal-fired power plant by an additional 600 MW which would amount to $1 billion.

The Sual facility, the largest and most cost-effective coal-fired power plant in the Philippines, was built in 1996. It started providing electricity to the Luzon grid in October 1999 through a 1,000 MW energy conversion agreement with the National Power Corp. (Napocor) under a 25-year build-operate-transfer (BOT) scheme.

Puno said they are also holding discussions with the Aboitiz Group for the 400-MW expansion program of 735-MW Pagbilao facility estimated to cost $500 million.

The Pagbilao coal-fired power plant is located within a 200-hectare lot in Isla Grande, Bgy. Ibabang Polo in Pagbilao, Pangasinan, which commenced operations on Feb. 6, 1993.

As independent power producer (IPP) contract administrators, SMC and Aboitiz serve as TeaM Energy’s partners in running the Sual and Pagbilao facilities, respectively.

“We have started talks with San Miguel and Aboitiz. We want to expand Sual and Pagbilao because of the common facilities. There’s the pier, the water treatment plant, and others. Greenfield plants will cost around $1.5 million per MW (to build) while these existing plants cost around $1 to $1.2 million, which gives us the advantage,” he said.

Depending on the outcome of the talks with their partners and results of the studies, Puno said they expect to commence with the expansion projects soon, in time for the projected growth in power demand by 2014.

Earlier, Puno said it would be difficult for TeaM Energy to undertake the expansion on its own “because if we do it ourselves we have to enter in a contract with them for joint facility utilization for the jetty and other common facilities.”