San Miguel to dispose diesel plant in favor of coal fired plant

San Miguel Corp will not pursue a $1 billion conversion of a 620-megawatt power plant it acquired in 2009 and is now looking to sell it.

The company paid the government $13.5 million for the Limay combined cycle facility in Bataan, north of the capital Manila.

"Yes, we may," San Miguel president Ramon Ang told Reuters when asked if they were selling the facility.

the company wanted to dispose of the asset because of the high cost of diesel fuel used to run the power plant and is preparing for the acquisition of other power plants over the next several years.

San Miguel's power arm, SMC Global Power Holdings Corp, is planning to raise up to 27.3 billion Philippine pesos or $624 million this year, in what maybe the country's biggest initial public offering, to fund additional investments in power projects.

SMC Global Power said in a regulatory filing it was considering adding 3,000 MW of new capacity in its power portfolio in the next 10 years via greenfield power projects requiring investments of about 90.4 billion pesos.

The new facilities are composed of two coal-fired plants currently in advanced stages of planning -- the 300-MW facility in Cavite on the main Luzon island and a 150-MW plant in the central Leyte province -- and new power projects in Bulacan province north of Manila and in Davao in southern Philippines.

It also wants to bid for a state contract to manage and use the power output of the 146-MW Naga power plant, and the 588-MW Unified Leyte geothermal facility, both in central Philippines.