SMC Global Power buys $1.2B banked gas from PNOC


SMC Global Power Holdings Corp. (SMCGP), through its subsidiary South Premiere Power Corp. (SPPC), has purchased the remaining banked gas from the Philippine National Oil Co. (PNOC) for $1.2 billion (around Php 67.3 billion). 

In a report by BusinessMirror, SPPC has entered a gas supply agreement with PNOC for 70.26 petajoules of banked gas in daily volume to help run the Ilijan Power plant between 45% to 75% plant factor. The said volume is expected to support Ilijan’s fuel requirements until February 2024. 

The gas sale and purchase agreement (GSPA) were executed last June 23, PNOC said. 

The banked gas, however, has yet to be delivered as the Malampaya consortium and operator Shell Philippines Exploration BV (SPEX) have yet to comply with the series of directives by the Department of Energy (DOE). 

Under the GSPA, PNOC is requiring the consortium to resume the supply and maintain the allocation of natural gas minimum daily contract quantity 

The Malampaya consortium ended its GSPA for the Ilijan plant in June. 

The purchase of PNOC’s remaining uncontracted banked gas will assure that supply will not be stranded and would ensure uninterrupted operations for the Ilijan plant – which is one of the largest natural gas plants in the country.

SPPC is also set to purchase commercial liquefied natural gas (LNG) for the Ilijan plant once its LNG terminal, currently being built by the Atlantic Gulf and Pacific Co., commences operations within the year.