COC No. 122 Isabela Coal Mine and Power Plant Project

Project Location : City of Cauayan and Municipalities of Benito Soliven and Naguilian, Province of Isabela

Nature of Project :  Coal Mining and Power Plant Operation.

JV Partners and Percent Equity :  None

Project Objective(s) : PNOC EC aims to promote the use of indigenous coal sources and augment the energy demand requirement of Isabela and the country as a whole.

Project Description: The Project is a pioneering undertaking. It seeks to utilize low rank indigenous coal to fuel an electric power plant employing “progressive mining and rehabilitation method” and “clean coal” technology.

COC 122 is located approximately 300 kilometers north of Manila and includes portions of the City of Cauayan and the municipalities of Naguilian and Benito Soliven, all within the province of Isabela, in the Cagayan Valley region.  Isabela Province is located at the northeastern part of Luzon and project areas are mostly rolling and with grazing and barren lands, denuded forests, and corn plantations.

Brief Background : The Project is being undertaken by virtue of COC 122 awarded by the DOE to PNOC EC, giving the Company exclusive exploration rights over nine (9) coal blocks, totaling 9,000 hectares. COC 122 was converted to “development and production” contract from “exploration” contract in 2002. In 2010, the Company acquired the ECC for both the mine and the power plant.

In January 2014, PNOC EC submitted a JV Proposal to the NEDA-ICC to develop the mine and the mine-mouth power plant as an integrated project in partnership with the private sector consistent with the 2013 NEDA revised JV Guidelines.

JV proposal was presented to the NEDA ICC – Technical Board (ICC TB) and NEDA ICC – Cabinet Committee on 15 July 2014 and 5 August 2015, respectively. The ICC-Cabinet Committee however deferred its decision to endorse the proposal to the NEDA Board pending, among others, the approval of the GCG, and DOJ’s opinion that PNOC EC cannot enter into the power generation business.

During the year, PNOC EC also continued the conduct of Corporate Social Responsibility (CSR) and Information, Education, Communication (IEC) activities to maintain the support of the communities.

In June 2016, PNOC EC was able to secure a favorable DOJ opinion that it can enter into power generation business. PNOC EC also provided livelihood programs in Cauayan City, the planned location of the power plant.

As of end Dec 2016

(page update February 20, 2017)