3 power firms sign $3.3-B deal for LNG facility

PANGILINAN-LED MERALCO PowerGen Corp. (MGen), Aboitiz Power Corp. (AboitizPower), and Ang-led San Miguel Global Power Holdings Corp. (SMGP) have forged a deal worth $3.3 billion, or around P168 billion, to establish an integrated liquefied natural gas (LNG) facility in Batangas.

The collaboration is expected to augment the country’s power supply with over 2,500 megawatts (MW) of generation capacity once fully operational, SMGP said in a statement on Sunday.

“For the first time, three leading power companies are working together to secure our country’s energy needs while transitioning towards cleaner power sources,” SMGP Chairman and President Ramon S. Ang said.

SMGP is the power arm of the conglomerate San Miguel Group, while MGen is the power generation arm of the electricity distribution utility Manila Electric Co. (Meralco).

Under the deal, MGen and AboitizPower will jointly invest in two of SMGP’s gas-fired power plants: the 1,278-MW Ilijan power plant and a new 1,320-MW combined cycle power facility.

The Ilijan power plant resumed its operations last year, while the new power facility under Excellent Energy Resources, Inc. is expected to start operations by the end of 2024.

The three entities will also invest in “almost 100%” of the LNG import and re-gasification terminal owned by Linseed Field Corp., a unit of Atlantic Gulf & Pacific Co.

“This will be used to receive, store and process LNG fuel for the two power plants, thus fully integrating the local energy sector into the global natural gas supply chain,” the company said.

UBS AG served as the financial adviser to MGen and AboitizPower on the transaction, according to Meralco.

MGen Chairman Manuel V. Pangilinan described the deal as a “pathbreaking venture.”

“Apart from transforming the energy landscape of the Philippines, this symbolizes a milestone alliance among major players in the energy industry towards a more sustainable future. We are thrilled to have such reliable partners as we lay the foundation for a brighter, greener future,” he said.

SMGP said that the “combined expertise and resources” will “guarantee the delivery of dependable and competitively priced energy while helping to boost economic growth and environmental preservation.”

“Both LNG and renewables are needed to achieve a balanced energy mix and well-planned energy transition… economic development is impossible without energy security, and this investment is a definitive step forward in that direction,” AboitizPower Chairman Sabin M. Aboitiz said.

Under the Philippine Energy Plan, the Department of Energy aims to increase the share of LNG in the country ’s power mix to 26% by 2040, which is seen as “a suitable transition fuel.”

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

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