Mirant’s urgent action on BPC substation sought
Manila Bulletin
May 8, 2006
A revised long-term power supply agreement is about to be concluded with the National Power Corporation (NPC) to revive the commercial operations of the Bataan Polyethylene Corporation (BPC), an energy official has revealed.
But there remains some hitch in completing the loop for providing a reliable electricity supply for the petrochemical facility; thus, the government is now directing efforts to seek Mirant Philippines Corporation’s ‘high priority action’ on the substation that would cater to BPC’s power needs.
By the latter part of last year, National Petrochemical Co., a subsidiary of Iran’s petrochemical giant NPC International, announced that it is ready to fork out $ 100 million to resume commercial operations of the Bataan polyethylene plant.
The investment infusion would entitle the Iranian firm 60 percent stake in the NPC Alliance Corporation in a share purchase agreement it concluded with the Metro Alliance Holdings and Equities of the Gatchalian group; which retains 40 percent shareholdings.
Mirant reportedly made initial manifestation to the government that it cannot easily offer the use of its power substation because of the entry of an Iranian partner in the idled BPC facility.
Given the prevailing unilateral sanctions of the US State Department against Iran, it was made clear that American companies cannot do direct business or financial transactions with Iranian entities or investors.
For that, the government is now in a dilemma on how it can finally steer into motion the resumption of BPC’s operations since its electricity needs, which is a key component for such move, is not hammered out yet.
Mirant has invested for the substation and was supposed to cater to the power delivery needs of the entire petrochemical park in Mariveles, Bataan; so much so that the facility was set at roughly 100-megawatt capacity.
"We certainly want BPC to restart its operations soon…so, we are now looking at several options on howwe can remedy our dilemma with the substation — we might just build a new one or we’ll just acquire the substation and compensate Mirant," the energy official has stressed.
However, the present capacity of the substation is not seen as a practical remedy as the initial needs ofthe petrochemical plant may just be at 5.0 megawatts.
The entry of new investors in BPC was taken as a very positive development by the Philippine National Oil Company (PNOC) which was given the mandate by Malacañang to resuscitate the country’s flagging petrochemical industry.
But as preparations are being carried out to set the petrochem facility’s commercial operations into motion for a new round, dilemmas came along the way, primarily in the provision of electricity supply for the project.
Pressed for comment, PNOC president Eduardo V. Manalac noted that they are taking all possible approaches on resolving the problem; but he said this is balanced with what the new investors in BPC havebeen asking for from government.
Aside from production of polyethylene, it was noted that the Iranian firm is likewise looking at the production of downstream petrochemical products.
It has been emphasized that the initial funds to be raised shall cover the cost of recommissioning the Bataan polyethylene plant and the purchase of startup feedstock to prepare it for operations.
It has been the policy of the government to first strengthen the mid-stream sector of the petrochemical industry to establish a market for the long-envisioned naphtha cracker facility.
BPC was previously owned and operated by a consortium of British Petroleum of the United Kingdom, Petronas of Malaysia and Sumitomo of Japan and local investors.
From the Bataan polyethylene plant’s current rated capacity of 275,000 tons, this is still lined up for possible expansion by employing the so-called BP innovene gas phase process. This method enables the processing of the polyethylene resin for distribution to local plastic manufacturers.
The re-commissioning and eventual operation of theBataan polyethylene plant is seen crucial to the government’s thrust to revitalize and strengthen themid-stream petrochemical industry.
May 8, 2006
A revised long-term power supply agreement is about to be concluded with the National Power Corporation (NPC) to revive the commercial operations of the Bataan Polyethylene Corporation (BPC), an energy official has revealed.
But there remains some hitch in completing the loop for providing a reliable electricity supply for the petrochemical facility; thus, the government is now directing efforts to seek Mirant Philippines Corporation’s ‘high priority action’ on the substation that would cater to BPC’s power needs.
By the latter part of last year, National Petrochemical Co., a subsidiary of Iran’s petrochemical giant NPC International, announced that it is ready to fork out $ 100 million to resume commercial operations of the Bataan polyethylene plant.
The investment infusion would entitle the Iranian firm 60 percent stake in the NPC Alliance Corporation in a share purchase agreement it concluded with the Metro Alliance Holdings and Equities of the Gatchalian group; which retains 40 percent shareholdings.
Mirant reportedly made initial manifestation to the government that it cannot easily offer the use of its power substation because of the entry of an Iranian partner in the idled BPC facility.
Given the prevailing unilateral sanctions of the US State Department against Iran, it was made clear that American companies cannot do direct business or financial transactions with Iranian entities or investors.
For that, the government is now in a dilemma on how it can finally steer into motion the resumption of BPC’s operations since its electricity needs, which is a key component for such move, is not hammered out yet.
Mirant has invested for the substation and was supposed to cater to the power delivery needs of the entire petrochemical park in Mariveles, Bataan; so much so that the facility was set at roughly 100-megawatt capacity.
"We certainly want BPC to restart its operations soon…so, we are now looking at several options on howwe can remedy our dilemma with the substation — we might just build a new one or we’ll just acquire the substation and compensate Mirant," the energy official has stressed.
However, the present capacity of the substation is not seen as a practical remedy as the initial needs ofthe petrochemical plant may just be at 5.0 megawatts.
The entry of new investors in BPC was taken as a very positive development by the Philippine National Oil Company (PNOC) which was given the mandate by Malacañang to resuscitate the country’s flagging petrochemical industry.
But as preparations are being carried out to set the petrochem facility’s commercial operations into motion for a new round, dilemmas came along the way, primarily in the provision of electricity supply for the project.
Pressed for comment, PNOC president Eduardo V. Manalac noted that they are taking all possible approaches on resolving the problem; but he said this is balanced with what the new investors in BPC havebeen asking for from government.
Aside from production of polyethylene, it was noted that the Iranian firm is likewise looking at the production of downstream petrochemical products.
It has been emphasized that the initial funds to be raised shall cover the cost of recommissioning the Bataan polyethylene plant and the purchase of startup feedstock to prepare it for operations.
It has been the policy of the government to first strengthen the mid-stream sector of the petrochemical industry to establish a market for the long-envisioned naphtha cracker facility.
BPC was previously owned and operated by a consortium of British Petroleum of the United Kingdom, Petronas of Malaysia and Sumitomo of Japan and local investors.
From the Bataan polyethylene plant’s current rated capacity of 275,000 tons, this is still lined up for possible expansion by employing the so-called BP innovene gas phase process. This method enables the processing of the polyethylene resin for distribution to local plastic manufacturers.
The re-commissioning and eventual operation of theBataan polyethylene plant is seen crucial to the government’s thrust to revitalize and strengthen themid-stream petrochemical industry.
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