PETRON Corp. will sell back its 140-megawatt (MW) solid-fired power plant to San Miguel Corp.’s (SMC) power unit in Limay, Bataan.
The country’s largest oil refiner said Tuesday that it has signed a memorandum of understanding (MoU) with SMC Powergen Inc., a subsidiary of SMC Global Power Holdings Corp., for the sale of the power plant.
Under the MOU, SMC Global Power will conduct a preliminary review of the power plant and its operations over a six-month period to determine the feasibility of a possible acquisition.
Petron owned the plant but sold it to SMC Powergen in September 2013. Then in December 2016, Petron re-acquired the power asset from SMC Powergen for around P20 billion.
The power plant, with a rated capacity of 140 MW, supplies the power requirements of Petron’s 180,000 barrel-per-day refinery in Bataan.
The power facility used to produce only 70 MW. SMC Powergen expanded the plant’s capacity to 140 MW in 2014.
The MOU was signed by Petron SVP and CFO Emmanuel E. Eraña, Petron General Manager Lubin B. Nepomuceno, SMC Powergen General Manager Elenita D. Go, and SMC Powergen Director Ferdinand K. Constantino.
SMC Powergen is a subsidiary of SMC Global Power Holdings Corp., SMC’s power-generating arm.
Petron is also a unit of SMC. It posted a net income of P2.6 billion at end-June this year from P9.5 billion in the same period last year as petroleum sales bore the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Consolidated sales reached P254.8 billion from January to June, down 7 percent from the same period last year.
“These setbacks are just temporary and are all part of the business. We remain optimistic for the second half of the year given signs of modest recovery from gasoline and petrochemical margins recently seen in the market,” said Petron President and CEO Ramon S. Ang.