Aboitiz power eyes renewal of Chevron deal

Posted at 12/26/2012 8:07 AM | Updated as of 12/26/2012 8:09 AM

MANILA, Philippines - Aboitiz Power Corp. is hoping to renew its steam sales agreement with global energy giant Chevron for its 289-megawatt (MW) Tiwi plants in Albay and the 458-MW MakBan facilities in Laguna and Batangas.

Chevron Geothermal Philippines Holdings Inc., a wholly-owned subsidiary of American firm Chevron, operates the geothermal production field that supplies the steam requirement of the Tiwi-MakBan facilities.

Aboitiz Power’s existing agreement with Chevron will expire in May 2013.

The company is hopeful that with the potential investment of the SM Group into Chevron, negotiations would gather pace. The Sy family has taken a 60-percent interest in Philippine Geothermal Power Production Co. Inc., a joint venture with Chevron.

SM was selected by Chevron as partner for the latter’s geothermal power business in the country. The move was aimed at meeting the constitutional provision limiting foreign equity ownership of entities engaged in the exploration of renewable energy resources to only 40 percent.

Analysts said if no deal is reached by June next year, Tiwi-MakBan’s steam pricing will be based on the coal-indexed geothermal resource supply contract, which will push steam cost to P2.80 per kilowatt-hour, 74 percent higher than current cost.

Aboitiz Power has applied for permits to explore geothermal power source in some 20,000 hectares of land in Pampanga and nearby Zambales.

The company is a leader in the country’s renewable generation industry with investments in geothermal and hydroelectric generation assets located throughout the Philippines. It also pioneered the systematic development of small hydroelectric generation plants back in late 1980s.

Its hydroelectric power generation assets are located in Ilocos Sur, Isabela and Benguet.

It launched its Sibulan hydropower plant in Mindanao, a greenfield project that added 42.5 MW of cleaner and renewable energy to the Mindanao grid. One MW of energy can provide power to about 1,000 households.