CONGLOMERATE San Miguel Corp. (SMC) is planning to invest about $33.6 billion in three major projects including a new oil refinery, an integrated steel mill, and ocean tidal power, the president of the company said.
The new investments will help meet the growing demand for oil and steel and provide a new source of renewable energy, SMC President and Chief Operating Officer Ramon Ang told reporters in an interview last week.
“We’re studying to build an oil refinery with a capacity of 250,000 barrels a day, which can produce petrochemicals and aromatics. It’s worth $15 billion but the partner is not yet finalized,” he said.
SMC subsidiary Petron Corp., the country’s largest oil refining and marketing company, has a nominal capacity average of 160,000 barrels daily compared to average Philippine consumption of 350,000 barrels of oil a day.
“We’re also studying if we can build an integrated steel mill, which can produce steel from iron ore all the way down to the finished product,” Ang said.
He said the mill, which will have a stainless steel facility that can produce 300 series and 400 series ssteel, will also cost $15 billion.
“In an integrated steel mill, it mixes iron ore, nickel, and chromite to produce stainless steel,” Ang said. “The resulting product is of high value for export and for domestic use. We can even supply billets to all steel mills in the Philippines.”
Ang said SMC is also looking at harnessing ocean tides to generate energy. “I believe in the next few months we’ll be showing you our projects one by one, but an example is the ocean tidal project which [will have]a capacity of 1,200 megawatts,” Ang said.
“It’s huge but easy to operate because it doesn’t require fuel to run. You build it once and it will run forever. According to our study, we can build about 18,000 MW of renewable energy out of ocean tidal [power]in the Philippines,” he said.
“Ocean tidal technology costs $3 million per megawatt so this is a big project, whereas clean coal costs $2.5 million and dirty coal costs $1 million” per megawatt, he explained.
This means that with a planned capacity of 1,200 MW, the tidal power project would cost around $3.6 billion.
Construction of the steel mill and oil refinery would take three-and-a-half years, while the ocean tidal project will take five years to complete, according to Ang.
For the ocean tidal project, San Miguel group will submit the documents to the Board of Investments (BoI) and the Department of Energy (DoE).
“We haven’t filed yet because when we do, we’ll be asked to submit a lot of information. When you file, everything must be ready, otherwise others will just copy it,” Ang said.
“We’ve been studying this project for a long time and we’ve spent time and money on it. We have foreign consultants who have been engaged in this type of project,” he said.
“Finally, it passed the financial feasibility study stage. At first we had a technical feasibility study done and we hired international companies who passed this already. Then we hired a financial feasibility study. When it passes that, the project will be [deemed]bankable and can be executed,” he added.