Firm Eyes Coal-bed Methane Prospect

Firm eyes coal-bed methane prospect

By MYRNA M. VELASCO, Manila Bulletin

18th March 2007

Local firm Sultan Energy Philippines Corporation is validating prospect for potential development of a 100-megawatt power facility in Sultan Kudarat utilizing coal-bed methane (CBM) gas resources.

According to Sultan Energy president Rufino B. Bomasang, their prospect in Mindanao area is sprawling on 7,000 hectares and could yield up to 100 billion cubic feet of CBM that could be converted for electricity generation purposes. Sultan Energy has been awarded coal operating contracts within the Daguma mountain range, which is lying between the provinces of South Cotabato and Sultan Kudarat.

Methane gas generally poses danger to coal miners as it can trigger explosions. But Bomasang emphasized this can be turn into an asset if utilized for power generation and with the application of appropriate technology.

"Sultan Energy is willing to put in additional investment to develop CBM," Bomasang indicated.

The re-assessment and development of coalbed methane for energy applications and usage was the subject of a recent bilateral deal concluded by the Department of Energy (DoE) with the United States government.

The energy department has identified 19 coal districts nationwide containing significant coal deposits and offered these to prospective developers like Sultan Energy.

Together with its affiliate firm MG Mining & Energy Corporation, Sultan Energy previously committed investment of up to $ 300 million for a 200megawatt mine-mouth coal power project in Sultan Kudarat which is targeted for commercial operation in 2011.

The presented project costs would include 0 million [sic] for the power project and $ 50 million-$ 100 million for coal mine development activities.

As assessed, the quality of coal to be mined for the proposed coal facility is lignite. Project proponents said they will utilize circulating fluidized bed combustion (CFBC) technology for the proposed power facility.

It was bared that the coal mines operated by MG Mining in the area could yield up to 800,000 tonnes a year; which would be enough to run the planned power project.

The company noted that it already extracted extensive coal resources in its seven blocks in Daguma; while advancing development of three more coal operating contracts in Surigao del Sur. The off-take arrangement or market of the electricity output, project sponsors said, would not be much of a concern given forecasts that the area would soon be badly needing additional power supply because of briskly expanding economic activity in northeastern part of Mindanao.