Oil refinery giant Petron Corp is set to re-acquire its 140 – megawatt (MW) solid fuel – fired plant from the San Miguel Corp’s SMC Powergen Inc for 20 billion to support the operations of its refinery in Bataan.
Petron and SMC PowerGen have signed definitive agreements for the purchase of the 140 MW co – generation solid fuel – fired power plant located in Bataan.
“The purchase of the Power Plant would lower the power and steam costs of the Petron Bataan Refinery,” Petron said.
The power plant will be bought at a cost of P20. 3 billion where P15.97 billion was paid yesterday and the remaining P4.06 billion will be paid on or before July 31, 2017.
The acquisition will be funded by internally generated cash and through credit facilities Petron secured earlier.
The power plant was used by SMC Power Gen Inc for power and steam production, which Petron intends to do the same to optimize the operations of its refinery.
The acquisition was announced last September, with Petron’s executive committee granting authority “to negotiate, enter into and conclude” with SMC PowerGen or the power asset.
At the beginning of 2016, Petron commissioned the $2 billion refinery upgrade project, allowing it to produce more high – value fuels and petrochemicals. It said costs went down since its 180,000 barrels-per-day Bataan refinery can now process cheaper crudes.
SMC Powergen is a subsidiary of the SMC Global Power Holdings Corp., the power generating arm of the San Miguel group.