San Miguel aims to double power generating capacity in 5 yrs

ABS-CBN News

Posted at Jan 11 2011 07:19 PM | Updated as of Jan 12 2011 03:21 AM

MANILA, Philippines - Diversifying conglomerate San Miguel Corp is aiming to double its existing power generating capacity to 6,000 in the next 5 years.

Alan Ortiz, the president of the conglomerate's power arm, San Miguel Global Power, told reporters on Jan. 11 of its plans to add 3,000 megawatts of new capacity.

The group is focusing on Luzon and Mindanao, which are the areas expected to experience power supply problems.

"Hopefully we can complete the new plants within the term of President Aquino," Ortiz said.

Coal

The group eyes coal-fired power plants that will tap coal from Daguma mines, which San Miguel Energy Corp, another subsidiary, acquired in 2010.

The Daguma coal block has an area of 7,000 hectares and is located in the provinces of South Cotabato and Sultan Kudarat in Mindanao.

Other coal mining assets of San Miguel in Mindanao include Bonanza and Sultan.

Together with Daguma, the three mines could produce 1,200 megawatts of electricity, San Miguel Corp president previously said.

San Miguel also has a stake in the Tampakan mine, which has one of the largest copper-gold deposits in the world. It is located also in South Cotabato.

Not dominate

Ortiz added they don't want to dominate the required power supply since the planned new 3,000 capacity from the San Miguel power plants will not address the entire supply deficit.

"The 3,000 MW is only 1/5 of the deficit so other companies can fill in the gap. We don't want to dominate. We just want to build what is possible," Ortiz said.

Aside from building new plants, Ortiz said the company is also planning to expand the capacity of existing power plants and is looking to acquire the power generating assets to be offered by Power Sector Assets and Liabilities Management or PSALM.

"We want to acquire more power generating assets that will be offered by PSALM," Ortiz said.

Among the power assets that are scheduled to be offered to interested investors by PSALM include the 650-MW Malaya thermal power plant, Caliraya-Botokan-Kalayaan hydropower plants,Sucat Thermal Power Plant and the Agus and Pulangui power plants.

Biggest 'power' player

The San Miguel group is already the biggest player in the power generation sector of the country.

Most of its power-related assets are housed under San Miguel Global Power Holdings Corp, which has acquired 100% of Global 5000. It consolidates 4 power subsidiaries,

It currently has capacity of over 3,300 MW from the following:

  • 1,200-megawatt Sual coal-fired plant
  • 600-MW Limay thermal facility
  • 340-MW San Roque hydro facility
  • 1200-MW Ilijan natural gas-fired facility

Ortiz said the company is still studying how much in additional capacity that will be added to thew existing power plants.

No deal roadshow

Meanwhile, San Miguel Global is meeting with investors in Singapore, Hong Kong and London this week for a "no-deal roadshow".

The company met with local banks to drum up interest on the possible dollar-denominated bond sale. Ortiz and other San Miguel officials refused to comment on the bond sale including the size and timetable.

Sources however noted that a planned bond sale could take place within this month with size ranging from $250 million to $500 million.