Aboitiz Group to spend US$ 150 million on upgrades to Tiwi-Makban

Alexander Richter 26 May 2009

Aboitiz Power Corp. plans to spend some US$150 million for the rehabilitation and upgrade of the 289-megawatt (MW) Tiwi and 458.53-MW Makban geothermal facilities in the next four to five years.

Announced by Aboitiz Power Corp. (APC), “the power generation arm of the Aboitiz Group, plans to spend some US$150 million for the rehabilitation and upgrade of the 289-megawatt (MW) Tiwi and 458.53-MW Makban geothermal facilities in the next four to five years.

APC senior vice-president Luis Miguel Aboitiz, at the turnover ceremony of the Tiwi-Makban geothermal power plants, by PSALM to Aboitiz Power, said this budget is expected to cover the upgrading and drilling of some additional geothermal wells to improve the company’s capacity.

He said there are already ongoing drillings of new wells. “Including additional steam supply and drilling, that’s around US$150 million over the next four to five years,” he said, adding that the existing power plants needed upgrading.

“The plants are 20 plus years old so we plan to increase [its capacity] from 462 MW to 517 MW in the next four years,” Aboitiz said.

President Arroyo witnessed the handing of the P8.2-billion check representing partial payment for the Tiwi-Makban power plants by Aboitiz to the Power Sector Assets and Liabilities Management Corp. (PSALM).

The Aboitiz Group won the Tiwi-Makban auction last July 2008 with a bid price of over US$446.888 million.

The P8 billion will cover the 40 percent downpayment for the geothermal assets while P492 million will be for AP Renewables Corp. payment for land lease.

Located at the boundary of Bay and Calauan towns in Laguna and Sto. Tomas, Batangas the Tiwi-Makban plants – consist of Plants A and B with two 63-MW units each, Plant C with two 55-MW units, Plants D and E with two 20-MW units each, and a binary plant with five 3-MW and one 0.73-MW units.

The Aboitiz Group has been aggressively bidding for National Power Corp. (Napocor) assets.

The company is targeting to double its generating capacity to 1,161 MW from the current level of 578 MW by 2011.

Under the asset purchase agreement and the geothermal resources sales contract attached to the plants, AP Renewables should rehabilitate and restore units 5 and 6 of the Makban facility.

Aboitiz said AP Renewables targets to increase the steam capacity of the Tiwi facility and has asked Chevron Geothermal Inc. to drill a new well to increase steam supply.

Chevron Geothermal operates and maintains the Tiwi-Makban geothermal facilities.

Upon closing of the Tiwi-Makban purchase, APC will have investments in generation capacity of 1,040 MW, 77 percent of which are powered from renewable sources of energy.

Within the two-year period, the company is also looking at the completion of the rehabilitation and expansion of the 75 MW Ambuklao-Binga plant. Once completed, the combined capacity is expected to expand by approximately 30 percent to 225 MW with a combined annual generation of approximately 760 gigawatthour (gWh).

APC is also looking at more possible acquisitions this year, in particular the contracts for the independent power producers’ administrators (IPPAs).

Meanwhile, Energy Secretary Angelo T. Reyes said the successful bidding and turnover of Tiwi-Makban is expected to “boost government’s campaign on renewable energy sources.” Geothermal is considered a renewable energy source.

For his part, PSALM president and CEO Jose C. Ibazeta said after the turnover of Tiwi-Makban, they already contributed a total of US$1.3 billion to government coffers due to the successful sale of Napocor assets.”

Source: PhilStar