Philippines: 2 remaining geothermal contract areas under review

Philippines: 2 remaining geothermal contract areas under review Puerto Princesa, Palawan, Philippines (source: flickr/Lon&Queta, creative commons)
Alexander Richter 7 Apr 2010

The Philippines DOE reviews 2 remaining geothermal contract areas in Palawan and awards two sites of up to 40 MW to PNOC-RC.

In news from the Philippines, it is reported that “the negotiation for reconsideration of the geothermal service contract of the 1-megawatt (MW) geothermal prospect in Sta. Lourdes-Tagburos in Puerto Princesa City, Palawan, is still under way, Energy Assistant Secretary Mario Marasigan told the  BusinessMirror yesterday.

In a phone interview, Marasigan said Primary Energy Corp., the developer of the contract area in Sta. Lourdes, has sought the Department of Energy’s  (DOE) approval of its request to soften the contract terms to develop the area.

“It [request] is still under evaluation. Upon completion, the contract will be endorsed to the Office of the Secretary for approval.  The terms they sought to soften are mostly on the financial aspect and committed work program terms of the contract,” he added.

Marasigan said they sought the DOE to soften the terms, considering the small amount of reserves the area has.  He said they will mostly likely award soon the geothermal service contract for the 40-MW Cagua-Baua geothermal prospect in Cagayan.

Marasigan added that so far, 8 out of 10 bid geothermal sites were awarded under open and competitive selection process.

In another development, Marasigan said the DOE has also awarded two geothermal service contracts to Philippine National Oil Co.-Renewables Corp. (PNOC-RC) with an estimated total generating capacity of 40 MW, which could entail an investment of $120 million.

Marasigan said the contracts were awarded to PNOC-RC and include the 20-MW Mainit-Sadanga and the 20-MW Buguias-Tino geothermal prospects in North Luzon.

“The geothermal contracts have already been awarded to PNOC-RC and its private partner. Magma Resources is taking the lead. These are frontier areas,” he added.

Marasigan said Magma Resources is a local group that forged a partnership with PNOC-RC for the development of the two projects.

PNOC-RC declined to comment when contacted by the BusinessMirror.

PNOC-RC data showed that the Mainit-Sadanga project was estimated to entail $60 million in investments, and is seen to generate about 18 gigawatt-hours of electricity per year.

“The proposed project will be connected to the Luzon grid. Power generated will be sold to the local electric cooperatives and industries, which shall benefit households, institutions, commercial and industrial consumers in the Mountain Province and other areas on the island of Luzon,” PNOC-RC said.

PNOC-RC added that the Buguias-Tinoc geothermal project is also expected to cost around $60 million and will supply the same level of electricity as the Mainit-Sadanga geothermal project.

The DOE earlier awarded a geothermal-exploration contract to PNOC-RC to develop the Mount Isarog volcanic chain for power generation, signaling its reentry to the geothermal-energy business.

Before being sold to a Lopez-led consortium in 2007, PNOC was the largest producer of geothermal power in the country through its geothermal subsidiary PNOC-Energy Development Corp.”

Source: Business Mirror