GMA leads first turnover of BOT geothermal project to PNOC
The Philippine Star
06/16/2006
President Arroyo led yesterday the first turnover of a build-operate-transfer (BOT) project involving a geothermal power plant from CE Cebu Geothermal Power Co., Inc. to state-owned PNOC-Energy Development Corp. (PNOC-EDC).
With the signing of the transfer agreement in Malacañang, the ownership and operation of the Upper Mahiao geothermal power plant in Kananga, Leyte will now be operated by PNOC-EDC starting June 25 this year, the end of the 10-year cooperation period of the two power firms.
CE Cebu Geothermal is a wholly-owned subsidiary of Mid American Energy Holdings Co. while PNOC-EDC is the geothermal and hydro development arm of the Philippine National Oil Co. (PNOC).
The agreement was signed by PNOC-EDC president Paul Aquino and CE International Ltd. Phils. president Joseph L. Sullivan.
Aquino told reporters that the transfer will improve the revenue stream of PNOC-EDC as it will result in lowering of payments for its BOT projects. PNOC has set aside some P7 billion for BOT payments in the next five years. This year, it will have to pay P2 billion worth of BOT contracts.
"As far as revenue is concerned – there is no revenue turnover – it’s just, technically speaking, lowering expense – as PNOC-EDC would no longer need to pay California Energy the energy conversion fee. So now, we operate the plant and it becomes our cost," he said.
Aquino said they would be maintaining 85 percent of California Energy’s existing personnel in the plant.
The Upper Mahiao power plant was constructed by Ormat Inc. and operated by CE Cebu for PNOC-EDC under a 10-year BOT agreement. Construction started in August 1994 and commercial operations started on June 25, 1996.
It holds the record as the largest geothermal power plant in the world that utilizes the geothermal combined cycle unit technology in a single powerhouse.
The plant provides power to National Power Corp. (Napocor) for distribution to Cebu through the Leyte-Cebu interconnection. It has an installed capacity of 125 megawatts (MW) and maximum reserve capacity of 173 MW.
Upper Mahiao is one of three BOT power plants operating in the steamfields developed by PNOC-EDC in Tongonan, Ormoc City, Leyte. The two others are the 231-MW Malitbog and 180-MW Mahanagdong power plants which are also operated by CE International Ltd. Phils., and will be turned over to PNOC-EDC in 2007.
The BOT Law became the basis for the establishment of power plant contracts for the Leyte geothermal power project which is now acclaimed as the single largest geothermal field in the world.
In contrast to the traditional geothermal development in the Philippines, wherein both conversion plant and electricity market are the responsibility of Napocor, the contract for the Leyte BOT power plants involves PNOC-EDC as steamfield developer having an energy conversion contract with a private sector-owned power plant and a power sales contract with Napocor.
06/16/2006
President Arroyo led yesterday the first turnover of a build-operate-transfer (BOT) project involving a geothermal power plant from CE Cebu Geothermal Power Co., Inc. to state-owned PNOC-Energy Development Corp. (PNOC-EDC).
With the signing of the transfer agreement in Malacañang, the ownership and operation of the Upper Mahiao geothermal power plant in Kananga, Leyte will now be operated by PNOC-EDC starting June 25 this year, the end of the 10-year cooperation period of the two power firms.
CE Cebu Geothermal is a wholly-owned subsidiary of Mid American Energy Holdings Co. while PNOC-EDC is the geothermal and hydro development arm of the Philippine National Oil Co. (PNOC).
The agreement was signed by PNOC-EDC president Paul Aquino and CE International Ltd. Phils. president Joseph L. Sullivan.
Aquino told reporters that the transfer will improve the revenue stream of PNOC-EDC as it will result in lowering of payments for its BOT projects. PNOC has set aside some P7 billion for BOT payments in the next five years. This year, it will have to pay P2 billion worth of BOT contracts.
"As far as revenue is concerned – there is no revenue turnover – it’s just, technically speaking, lowering expense – as PNOC-EDC would no longer need to pay California Energy the energy conversion fee. So now, we operate the plant and it becomes our cost," he said.
Aquino said they would be maintaining 85 percent of California Energy’s existing personnel in the plant.
The Upper Mahiao power plant was constructed by Ormat Inc. and operated by CE Cebu for PNOC-EDC under a 10-year BOT agreement. Construction started in August 1994 and commercial operations started on June 25, 1996.
It holds the record as the largest geothermal power plant in the world that utilizes the geothermal combined cycle unit technology in a single powerhouse.
The plant provides power to National Power Corp. (Napocor) for distribution to Cebu through the Leyte-Cebu interconnection. It has an installed capacity of 125 megawatts (MW) and maximum reserve capacity of 173 MW.
Upper Mahiao is one of three BOT power plants operating in the steamfields developed by PNOC-EDC in Tongonan, Ormoc City, Leyte. The two others are the 231-MW Malitbog and 180-MW Mahanagdong power plants which are also operated by CE International Ltd. Phils., and will be turned over to PNOC-EDC in 2007.
The BOT Law became the basis for the establishment of power plant contracts for the Leyte geothermal power project which is now acclaimed as the single largest geothermal field in the world.
In contrast to the traditional geothermal development in the Philippines, wherein both conversion plant and electricity market are the responsibility of Napocor, the contract for the Leyte BOT power plants involves PNOC-EDC as steamfield developer having an energy conversion contract with a private sector-owned power plant and a power sales contract with Napocor.
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