Philippines-based San Miguel (SMC), a business conglomerate, plans to convert its Limay combined cycle power plant to a natural gas-fired power facility. Ramon S. Ang, vice chairman, president and chief operating officer of San Miguel Corporation, is planning to spend at least $350m to convert the plant.
The Power Sector Assets and Liabilities Management (Psalm) has declared SMC unit as the winning bidder for the negotiated sale of the Limay power plant. The conversion of the power plant is expected to be completed in two years.
The Limay power plant with a total power generation capacity of 620MW is consisting of two 310MW modules. Its first module comprised three 70MW gas turbines and other with a 120MW steam turbine.
Ang, further added: “Though we offered to acquire the Limay for $13.5m, buying it at that cost is just one portion since we have to spend hundreds of millions of dollars [for its conversion] to lower the cost [of producing] electricity.”
The conversion of the power plant into a compressed natural gas (CNG)-fueled facility is expected to decrease the cost to produce electricity to around P3 to P4 per kilowatt-hour(kWh) from P18/kWh, using diesel fuel. Putting up a CNG tank would cost $150m in addition to another $200m needed to convert the existing diesel turbines, noted Mr. Ang.
The company is in discussions with the suppliers of CNG from Indonesia, Malaysia and even Qatar.
Mr. Ang also informed that the company intends to tie up Limay’s output to Petron’s refinery in Bataan, a subsidiary of SMC.
The company is working on a $2 billion acquisition deal in the power and energy sector.