The power generation arm of San Miguel Corporation (SMC) is targeting to resume the operation of the 1,200-megawatt Ilijan gas-fired power facility by February next year to help shore up supply in the Luzon grid within the summer months.
According to SMC President and CEO Ramon S. Ang, the power plant’s return to operation will be synchronized “with the availability of LNG (liquefied natural gas) that will be brought into the country at the time.”
He noted that the floating storage unit (FSU) that will cater to the gas requirements of the Ilijan plant will already be in operation within that timeframe next year, as has already been advised to the Department of Energy.
“That (Ilijan plant) will run by February. The LNG import terminal will already be operational by then,” he stressed.
The SMC chief executive indicated that when tight supply will reign in markets during the summer months, the Ilijan plant could be strategically positioned as a “must run unit” or the facility that can be called upon for dispatch by the system operator when there is sudden spike of power demand in the grid.
The Ilijan plant of the San Miguel group has a lease agreement as anchor end-user of the offshore LNG import facility that is being set by up Atlantic, Gulf & Pacific Company (AG&P), one of the project-sponsors of LNG projects that had been granted with a permit to construct, expand, rehabilitate and modify (PCERM) by the energy department.
The gas import facility initially targeted to reach commercial commissioning this year, but given the double whammy of surging international gas prices and the niggling impact of the coronavirus pandemic, the project’s completion had been stretched to first quarter next year.
The Ilijan power facility was turned over to South Premiere Power Corporation (SPPC), a subsidiary of SMC Global Power Holdings (SMCGP), in June this year following the lapse of the asset’s build-operate-transfer (BOT) contract that was initially sealed with state-run National Power Corporation (NPC) and was subsequently transferred to its spinoff company Power Sector Assets and Liabilities Management Corporation.
It was also in June this year when the gas supply and purchase agreement (GSPA) for the Ilijan plant had expired in reference to the gas fuel that was being sourced for the past 20 years from the Malampaya gas field.
SMC had also entered into a deal with government-run Philippine National Oil Company (PNOC) for a banked gas that could have been utilized for the Ilijan plant, but the exact schedule on when the next batch of the stored fuel will be lifted has yet to be sorted with the next operator of the gas field.