CFE to call for Petacalco II bids June

- Monday, May 26, 2003

CFE to call for Petacalco II bids June

Mexico's state power company CFE expects to publish the bidding rules for an engineering, procurement and construction (EPC) contract for the US$700mn 680MW Petacalco II generation project by mid-June, Petacalco's coal terminal manager Francisco Soto de la Vega told BNamericas.

Petacalco II is an expansion of the CFE's existing Petacalco plant in Guerrero state, which has six 350MW coal-fired turbines.

The CFE is currently studying technical issues regarding the type of cooling system and the number of generation units, Soto said. The company has not decided between building a cooling tower or using the same open sea-water system that cools the existing six units, and is also studying whether to use two 350MW units or a single 700MW unit, which would be more easily maintained.

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A decision should be taken in 15 days, Soto said.

The CFE expects to receive bids by December and decide on a winning bidder in the first quarter 2004. Construction would take three years.

The CFE is developing the Petacalco II project to meet projected higher demand from 2007 and to ensure diversity of fuel sources, since most new generation projects in Mexico are gas-fired, Soto said. By using coal instead of fuel oil, the operator will save US$140,000 a day for each 350MW turbine, he added.

The project will require two million tonnes of coal a year, which may entail an expansion of the existing receiving terminal at the Lazaro Cardenas port in neighboring Michoacan state, Soto said.

Italian-Argentine company Techint operates the existing coal terminal and will decide in 1-2 months whether an expansion is necessary, Soto continued. The CFE imports coal from Australia, Russia, China and Canada.

Spanish, Japanese and American companies have shown interest in Petacalco II.

Spanish energy companies Iberdrola, Union Fenosa and construction firm Grupo ACS could be interested in bidding on the project, Alejandro Sampelayo told BNamericas. Sampelayo is the Mexico and Central America director of Spanish company Expansion Exterior, which gives financial advise to Spanish companies interested in developing energy projects in foreign countries.

"Given the level of interest, I would not be surprised if there was one or more Spanish consortium participating in this bidding process," Sampelayo said.

Expansion Exterior will help a Spanish consortium to secure financing for the project under the Mexican government's Pidiregas deferred investment scheme, Sampelayo said.

"We have negotiated six packages of transmission lines under this financing scheme, and so the assistance of Expansion Exterior could be enormously useful for whichever Spanish company that we sign an agreement with," he said.

Spanish companies are seeking Mexican partners for the project, Sampelayo said.

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