Phillipines: Bidders 'baffled' on terms of Malaya LNG conversion

Phillipines: Bidders 'baffled' on terms of Malaya LNG conversion

Prospective bidders in the privatization of the 650-megawatt Malaya thermal
power plant are still baffled as to the definitive terms of the Department
of Energy's (DOE) proposal for it to be converted into a liquefied natural
gas-fired generating asset.

With many questions still unanswered, it was gathered that the bidding date
will be moved anew to April 15 this year from the March 30 re-scheduling
advised earlier. The original auction date was slated March 8.

According to Power Sector Assets and Liabilities and Management Corporation
(PSALM) Officer-in-Charge Lourdes S. Alzona, "the final transaction document
has yet to be presented to the PSALM Board," for the required approval.

According to qualified bidders, they recently met with a DOE official to
seek clarifications on Malaya's conversion plan to LNG.

Among the contentious concerns raised had been on the LNG supply source and
if there is already a definite entity that will put up the import terminal
and when will this be coming on stream.

The bidders said they have not gotten categorical answers yet from the DOE,
thus, they are at a loss as to how they would be packaging their offers at
bid submission date.

In previous interview with the media, Energy Secretary Alfonso G. Cusi
indicated that he would want PSALM to undertake a sensible study first on
the planned gas fuel shift for the Malaya facility.

The Malaya plant is currently called upon as a "must-run-unit", essentially
taking the form of "security asset" that could help stabilize grid supply
when available capacity runs tight either due to scheduled shutdowns or
forced outages of power plants.

LNG is still being cast as a future for the country's energy sector, with
state-run Philippine National Oil Company (PNOC) envisioned to be taking the
lead.

Plans have yet to take off from blueprint though and deep-pocketed investors
are still awaited to firm up plans on portended billions of dollars of fresh
capital outlay for the evolving Philippine gas market.

PNOC, on its own, may not have the technical expertise as well as the full
financial muscle to put up the integrated LNG facilities - starting from the
LNG import terminal to pipeline and distribution units and up to the anchor
load power plants.

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Link to Original Article:
http://business.mb.com.ph/2017/03/27/bidders-baffled-on-terms-of-malaya-lng-
conversion/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com