San Miguel Corp. (SMC) said while it does not have a direct agreement with the Malampaya consortium on the sale of the banked gas, its subsidiary, South Premier Power Corp. (SPPC) has an existing contract with the Philippine National Oil Co. (PNOC-EC) on behalf of government.
SMC said SPPC bought the Malampaya banked gas owned by the government through PNOC for $1.2 billion last June through a Gas Supply and Purchase Agreement under the direct supervision of the Department of Energy, the PNOC Board and the Office of the Government Corporate Counsel.
Prior to the deal, SMC said government, through PNOC, owns and exercises rights over 70.26 petajoules of banked gas in Malampaya.
According to the PNOC, banked gas is the accumulated unused gas of the Ilijan power plant as a result of the underutilization of the plant’s take-or-pay quantity from 2002 to 2007.
Under the said scheme, a fixed quantity of gas is being paid for by the power plant every year, whether they use the gas or not.
Earlier this week, the Malampaya consortium said it is not refusing to sell fuel to SPPC’s 1,200 megawatts Ilijan natural gas-fired power plant but mentioned there is currently no legal means for a sale to happen between the parties.
