Egat plans stakes in Philippine, Indonesian power plants

In addition, Egat will invest more than Bt300 million in the development of an Indonesian coal mine, with a view to exporting to Thailand, China and India.

The power plant in the Philippines has a capacity of up to 600 megawatts, Egat governor Sombat Sarntijaree said yesterday.

"We see an investment opportunity in the privately run power plants, as they are experiencing a cash crunch. Such investments will strengthen our business operations. The main criterion for our investment is that we must own not less than 25 per cent of each of the companies," he added.

Egat International yesterday signed a deal with two Indonesia coal-mining firms - Beringin Coal Prakasa, and Intermining and Energy - to jointly conduct mining operations on 180,000 rai in Sumatra's Jambi province. Based on preliminary exploration, Jambi is estimated to have reserves of 2.2 billion tonnes of coal.

Prutichai Chonglertvanichkul, acting president of Egat International, said the three parties would begin further exploration and assess the potential of the mine in February.

Exploration work will take between six and eight months, after which Egat International will draw up a mine development plan and establish a joint venture. It will hold 90 per cent of the company, with the rest jointly owned by the two Indonesian partners.

The initial budget for mine development is expected to be between Bt200 million and Bt300 million. Egat plans to put the coal from the mine on the Indonesian market as well export it to China, India and Thailand.

In Thailand, it intends to sell the coal mainly to cement plants.

The mine will also serve as a coal reserve for Egat's power plants in the Kingdom.

In addition, Egat plans to conduct a feasibility study on establishing a coal-fired power plant in the vicinity of the mine.

The price of coal is much more stable than that of crude oil. The fuel has dropped from between US$80 (Bt2,840) and $85 per tonne early this year to $75.