Petron re-acquires SMC Powergen plant for P20 B

MANILA, Philippines - Oil giant Petron Corp. is re-acquiring the 140-megawatt (MW) solid fuel-fired plant of San Miguel Corp.’s power arm for P20 billion to support the operations of its refinery in Bataan.

Petron and SMC Powergen Inc. signed yesterday definitive agreements for the purchase of the 140 MW co-generation solid fuel-fired power plant located in Bataan.

SMC Powergen is a subsidiary of SMC Global Power Holdings Corp., the power generating arm of San Miguel Corp.

The power plant will be purchased at a cost of P20.3 billion, of which P15.97 billion was paid yesterday and the balance of P4.06 billion to be paid on or before July 31, 2017.

Petron said the acquisition will be funded by internally generated cash and through credit facilities it secured earlier.

The power plant was used by SMC Powergen Inc. for the production of power and steam, which Petron intends to do the same to optimize the operations of its refinery.

“The purchase of the power plant would lower the power and steam costs of the Petron Bataan Refinery,” the oil firm said.

At the start of 2016, Petron commissioned the $2-billion refinery upgrade project, allowing it to produce more high-value fuels and petrochemicals. It said costs have gone down since its 180,000 barrels-per-day Bataan refinery can now process cheaper crudes.

Petron first announced the acquisition last September, with its executive committee granting authority “to negotiate, enter into and conclude” with SMC Powergen  for the power asset.

The then 2x35-MW power plant was previously owned by Petron until it was acquired by SMC Powergen in September 2013.

SMC Powergen doubled the capacity of the plant in the second half of 2014, adding 140 MW to the total capacity of SMC Global Power by the end of that year.