AT least two foreign firms have expressed interest in joining PNOC Exploration Corp. for the development of its coal mine and power plants in Isabela province.
PNOC-EC president and CEO Pedro Aquino said two firms have already partnered with local firms to pursue the project.
Aquino, however, did not want to give details about the two firms, except that these have submitted proposals to convert the coal mine into a gas mine, called synthetic gas, which will be used to power the plants.
“Their process is not traditional coal fired power plants,” explained Aquino. “What they will do is they will gassify the coal, or turn coal into gas, and then the gas they are going to produce, which is called synthetic gas, will be used to power the plants.”
Aquino said PNOC-EC, the oil and gas exploration arm of state-owned Philippine National Oil Co. (PNOC), is now evaluating the proposals.
According to Aquino, the evaluation process might be finished by the end of the year.
He said since these are unsolicited proposals, PNOC-EC will subject it to the so-called Swiss challenge, where other parties will match the proponents’ offer.
“Once we have submitted this to a Swiss challenge, then that’s the time we’ll make an award,” said Aquino.
The project is being undertaken by virtue of Coal Operating Contract (COC) 122, awarded by the Department of Energy (DOE) to PNOC EC on December 23, 1997.
This gives the company exclusive exploration rights over nine coal blocks, totaling 9,000 hectares.
In 2002, COC 122 was converted to a “development and production” contract from an “exploration” contract.
Three more coal blocks were awarded to PNOC-EC afterwards, by virtue of COC 141
In 2010, the Department of Environment and Natural Resources (DENR) granted PNOC-EC with an Environmental Compliance Certificate (ECC) for both the coal mine and the power plants.
In 2011, the-PNOC EC Board approved the development of the project under a joint venture scheme, consistent with the “Competitive Selection” mode of the 2008 guidelines of the National Economic Development Authority (NEDA) on joint ventures.
In January 2014, the government oil firm sent a letter to NEDA-Investment Coordinating Committee (ICC) requesting approval for the company’s joint venture proposal to undertake the development of the Isabela Coal Mine Development Project in compliance with the 2013 NEDA Revised Joint Venture Guidelines.
The PNOC-EC’s joint venture proposal was presented to the NEDA ICC Technical Board (NEDA-ICC TB) on July 15, 2014, and to the NEDA ICC Cabinet Committee on August 5, 2015.
The ICC Cabinet Committee deferred to take action, pending proof of PNOC-EC’s financial capability to undertake the project, among other requirements.
Last September 25, the NEDA ICC formally requested the Department of Finance (DOF) Corporate Affairs Group to review the proposal.