Byline: Myrna M. Velasco
The Alcantara-controlled Conal Holdings Corporation (CHC) has stricken a deal with local coal producer Sultan Energy Philippines Corporation for the coal requirements of its proposed 200-megawatt power facility.
The memorandum of agreement (MoA) prescribes a 25-year coal supply arrangement. The CHC-sponsored coal plant envisions an expansion of up to 900 megawatts until 2014 when electricity demand in Mindanao further picks up.
CHC is a 60-40 joint venture of the Alcantara group's Alsons Consolidated Corporation and Egco International of Thailand.
As stipulated in the pact, CHC will advance P50 million to Sultan Energy to help bankroll the latter's coal exploration and development activities.
CHC agreed to purchase the coal extracted from the site by Sultan Energy, for a contracted volume of 700,000 metric tons per year for 25 years.
The timeframe of coal procurement shall start from the plant's commercial date as targeted on November 30, 2011 and December 31, 2012.
Sultan Energy said it will supply the coal at a price indexed on international coal and freight prices. The pricing formula shall be stipulated in the definitive coal supply and purchase agreement that shall be mutually drawn and concurred to by the parties.
CHC assured that the technical design of its power project shall consider the facets of using locallymined coal to be supplied by Sultan Energy. …