Aboitiz unit eyes deal with PGPC on Tiwi-Makban by end of 2013
Aboitiz Power Corp. subsidiary AP Renewables Inc. (APRI) aims to finally sign an agreement with Chevron- and Sy-led Philippine Geothermal Production Co. Inc. (PGPC) on a general program for drilling new wells to boost steam feeding into the 400-megawatt Tiwi-Makban plants.
“We’re hopeful that we can resolve something by the end of the year,” APRI president and COO Michael Pierce told reporters.
At the moment, Pierce said there was a “conceptual discussion” on a drilling program (including the number of wells to be made) and whether this will be funded equally by APRI and PGPC. The cost of drilling per well could be about $6 million to $10 million.
Pierce said that without new wells, the Tiwi-Makban geothermal facility’s output would continue to decline from the current level of about 400MW, which is lower than the 460MW in production in 2008, when the Aboitiz Group acquired the facility.
There is a natural tendency for steam production in geothermal wells to drop over time. Historically, the Tiwi-Makban facility has recorded a decline of about 6 percent yearly. The facility has less steam to draw for conversion into electricity.
Earlier, Aboitiz Power president Erramon Aboitiz told reporters at the sidelines of Cleanergy Center at the MakBan power facility launch that there was a “general desire” on both APRI and PGPC to undertake new drillings. “We have to look at each individual prospect of wells and see what the paybacks are. In general, this is the direction we’re willing to go to but we don’t have a fixed program yet,” Aboitiz said.
“We’re here for the long-term so we want to keep the stream productive for the years to come.”
Aboitiz Power, through subsidiary APRI, acquired the Tiwi-MakBan geothermal plants through a bidding for $446.888 million.
APRI operates the Tiwi-Makban geothermal power plants in Batangas, Laguna and Albay. The geothermal facility supplies the power needs of the Abra Electric Cooperative, which serves the whole province of Abra.
PGPCI, the joint venture between Chevron Geothermal Inc. and the Sy family’s SM Investments Corp., operates the steam fields providing fuel to the plants. It won the contract from the Department of Energy.
In the meantime, Aboitiz Power has expanded its renewable energy footprint by spending about $150 million to increase the reliability and availability of the Tiwi and MakBan geothermal power facilities.
Aboitiz Power also spent some P80 million from 2010-2012 for its corporate social responsibility projects in health, education, and environment (tree-planting) for the host communities of Tiwi-Makban.