Pilipinas Shell gets OK to sell excess power
PILIPINAS SHELL Petroleum Corp. has gained its stockholders’ approval to expand its business to include the sale of excess electricity through the wholesale electricity spot market (WESM), it told the stock exchange on Thursday.
“We will do some operational adjustments, and just by making these operational adjustments it will allow us to sell some excess power to the grid if need be,” Cesar G. Romero, Pilipinas Shell president and chief executive officer, told reporters.
The expansion of the company’s business purpose was approved by its board on April 20, and the amendment to its articles of incorporation was approved by stockholders during the company’s annual meeting on May 16.
“Just to clarify, that selling of excess power is not the main driver of our business. We see that there is an opportunity because of the equipment we have, but our core business continues to be our highly profitable marketing businesses,” Mr. Romero said.
Stockholders representing 88.71%, or more than two-thirds, of the total issued and outstanding capital stock of Pilipinas Shell voted in favor of the ratification of the board decision.
“As any astute business operation, if there’s an opportunity to make extra margin on our refinery, then we will continue to do so,” Mr. Romero said.
OPEN TO PARTNERSHIPS
Separately, Mr. Romero said the company is “very open” to forming a partnership with other companies in building an import facility for liquefied natural gas (LNG) in the country.
In the past, local and foreign companies had expressed interest in putting up a facility that will allow the importation of LNG ahead of the expected depletion of the country’s offshore natural gas find west of Palawan province starting in 2024.
“It’s still very early days,” Mr. Romero said. “We are very open to partnerships with various groups including PNOC (Philippine National Oil Co.).”
PNOC has previously announced that local and foreign companies have approached the state-led exploration company for a possible partnership to build an LNG import terminal, storage and re-gasification complex.
“We had some exploratory conversations about it in the latter part of last year,” he said. “The key is to be able to understand how the economics would work because it’s a huge investment.”
He said an LNG facility would cost between $600 million and $1 billion, thus putting it up would require partnerships to shore up funding.
“The economics must be carefully understood in terms of how the investment will be recovered,” he said.
Shell companies in the Philippines include Shell Philippines Exploration B.V. (SPEx). SPEx and consortium partners Chevron Malampaya LLC and PNOC Exploration Corp. operate the Malampaya natural gas platform, which supplies gas to several power plants in Batangas and to Pilipinas Shell for its refinery and compressed natural gas refilling station. The project delivers up to 20% of the country’s electricity requirements.