Eastern Petroleum seeks MVP backing for biomass project
The Eastern Petroleum Group has approached the MVP group for possible partnership in a biomass power project in Mindanao.
“It’s still exploratory talks,” Eastern Petroleum Group chair Fernando Martinez told reporters, adding that he needed good partners to support the project.
Michael Toledo, media bureau head of the MVP group of companies and senior vice president for corporate affairs of Philex Mining Corp., confirmed that Martinez had approached the MVP group as a potential partner for the biomass project.
“We’re planning to do something together on biomass. It’s all still exploratory, we haven’t talked about details yet,” Toledo said.
Toledo said the MVP group was supportive of renewable energy (RE) and that it was one of the priorities of the group.
“We’re almost done with the ground preparations. After financial close I’ll be bidding the structural design and (construction) of the structure,” Martinez said. “In Mindanao there is a lack of reserves so this project is much needed.”
Eastern Petroleum is set to borrow about P3 billion to fund the construction and development of a 25-megawatt biomass power facility that will help fill the electricity supply gap in power-starved Mindanao, Martinez said.
About 70 percent of the project cost may be borrowed from a local bank while the rest of the funding may come from local and foreign partners.
“We will probably finalize arrangements 90 days from now,” he said.
Eastern Petroleum is partnering with a North American company to develop its multi-phase biomass power project as part of plans to diversify its existing fuel distribution business. The first 25-MW phase of the project in Butuan City, which is seen to boost the electricity-starved Mindanao grid, will be developed with Wellons Inc.
Pre-development work such as site acquisition, which can fit in expansion of up to 90 megawatts of biomass power, and permitting is almost complete, Martinez said.
Fernandez said his recent site tours with Wellons in Canada and the US showed that the North American company’s biomass power technology could lower production cost by 25 percent compared to the cost of production using oil based plants.
The project, he said, should help reduce the cost of electricity in rural Mindanao while, at the same time, creating much needed jobs for our upland farmers. The North American company will be supplying the equipment for the biomass plant.
The power plant and the associated feedstock plantation projects will be implemented by Eastern Petroleum subsidiary Caraga Renewable Power Corp. (CARE Corp.).
Wood chips from an industrial plantation of fast-growing trees in Agusan del Norte and Agusan del Sur will be used as feedstock for the plant.
Feedstock planting has already started at a plantation managed by a separate company under the joint venture of CARE Corp. and the Manobo council Wawa Tribal community in Agusan del Sur.
Wellons Inc. specializes in the design, manufacture and turnkey installation of biomass and gas fired thermal energy systems.
Data from the Department of Energy show that about half of fuel inputs for power generation in the Philippines comes from renewable energy, mostly from hydropower. The country seeks to triple its RE capacity by 2030 to curb its dependence on traditional energy sources such as coal.
