Shell wins P14B worth of supply contracts

MANILA, Philippines—Pilipinas Shell Petroleum Corp. bagged P14.3 billion worth of contracts to supply industrial fuel oil to government-owned power generation assets and state-managed capacities.

According to state-run Power Sector Assets and Liabilities Management Corp. (PSALM), Shell was awarded the contract to deliver P3.97 billion worth of industrial fuel oil to the 630-megawatt Malaya thermal power plant this year.

PSALM was, likewise, awarded a P3.76-billion contract to supply fuel for the 100-MW diesel facility of Western Mindanao Power Corp. (WMPC) in Sangali, Zamboanga; a P2.28 billion contract for the 55-MW bunker-fired power station of Southern Philippines Power Corp. (SPPC) in Alabel, Sarangani; and a P4.3-billion contract for the 146-megawatt Naga power complex in Cebu.

The state agency now manages and conducts bidding for the procurement of fuel, having taken over this function from the National Power Corp. It will continue to do so until the power generation assets and the management of the contracted capacities are turned turned over to the private sector.

At present, the Malaya thermal plant remains under the government as the facility is being considered by the Department of Energy for conversion into a natural gas-fed plant that will provide the anchor load for the planned gas pipelines in Luzon, particularly the $2.1-billion Batangas-Manila pipeline. The plan was to convert the power plant prior to its sale to the private sector so it can fetch a higher price.