SMC mulls LNG investments

MANILA, Philippines — The San Miguel Group is considering investments in the liquefied natural gas (LNG) sector to expand the capacity of the 1,200-megawatt (MW) Ilijan power plant, according to its top official.

SMC president and chief operating officer Ramon Ang said they are open to partnerships or building their own LNG terminal to support the expansion of the gas plant.

He said the group is also open to talks with First Gen Corp. to build the LNG terminal.

“We have a lot of options and First Gen and San Miguel are quite close so there is no problem if they will build their own terminal or we’ll do it jointly,” Ang said.

Earlier this month, First Gen announced it was targeting to start development of its $1-billion LNG terminal in 2019 as it looked to close partnerships and engineering, procurement and construction (EPC) contractors within the year.

The decision to invest in an LNG terminal comes after it changed its plan to convert the Ilijan power plant to a diesel plant once its IPPA contract expires in 2022

Ang said SMC is planning to keep the Ilijan plant as a gas-fired generating facility and raise its capacity to 3,000 MW.

The group’s power unit, SMC Global Power Corp., has already secured adjacent lands, which will make it easier to expand the plant’s capacity.

The initial plan was supposed to coincide with the impending depletion of the Malampaya deepwater gas-to-power project, which supplies the gas requirements of the power plant, by 2024. This is to allow the plant to still serve the peaking requirements of the Luzon grid.

The license for Service Contract 38 that allows the exploration of the Malampaya gas field in northwest Palawan will expire in 2024 but this can be applied for extension with the Department of Energy.

SMC Global, through subsidiary South Premiere Power Corp., operates the Ilijan power project under independent power producer administration (IPPA) contract .

The Ilijan plant should be turned over to SMC once its IPPA contract expires in 2022, Ang said.