Aboitiz Power Corp. plans renewal of steam sales contract with Chevron

Chevron geothermal power plant Tiwi, Albay, Philippines (source: flickr/sherwin_magayanes)
Alexander Richter 31 Dec 2012

Aboitiz Power Corp. hopes to renew its steam sales agreement with Chevron Geothermal Philippines Holdings for its combined Tiwi-MakBan geothermal plants in Laguna and Batangas, Philippines.

Reported this week from the 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 (ca $0.068/ kWh), 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.”

Source: ABS CBN News