$3.3-B LNG powerhouse starts equity revamp
MANILA, Philippines —The subsidiaries of distributor Manila Electric Co. (Meralco) and Aboitiz Power Corp. have agreed to form a joint venture meant to move the country’s liquefied natural gas (LNG) market forward.
In separate disclosures to the Philippine Stock Exchange on Monday, the companies said Meralco PowerGen Corp. (MGen) would take a 60-percent stake in Chromite Gas Holdings Inc. (CGHI), while Aboitiz-led Therma NatGas Power Inc. would take the remaining 40 percent.
Through CGHI, MGen and AboitizPower will invest in the 1,278-megawatt (MW) Ilijan gas-fired power plant of San Miguel Global Power Holdings Corp. (SMGP), as well as an upcoming 1,320-MW combined cycle power facility.
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This follows the landmark $3.3-billion deal forged by MGen, AboitizPower and SMGP to jointly launch the country’s “first and most expansive” LNG terminal meant to support the Marcos administration’s push for more gas supply.
Once fully operational, the LNG facility is expected to augment the power supply of the country with over 2,500 MW of generation capacity.
Energy transition option
Juan Paolo Colet, managing director of China Bank Capital Corp., said the big investment signified the power giants’ “strong confidence” in the country’s economic growth.
“This is a positive development for these companies as they are now better positioned to take advantage of the improving prospects of LNG as an energy transition option,” Colet told the Inquirer in a text message.
“This deal may also prompt other energy players to consider similar alliances as they race to build clean and sustainable power generation capacity,” he added.
READ: Natural gas supports uptake of RE, ensures stable power supply — DOE
The Department of Energy (DOE) has been saying that LNG, a fossil fuel, is a “crucial” transition fuel in the Philippine renewable energy journey.
August 2023 data from the DOE showed that natural gas accounted for 13 percent of installed power capacity in the country, with coal still contributing nearly half. Renewables currently make up at least 22 percent of the energy mix.
International think tank BMI, a unit of the Fitch Group, previously projected that Philippine LNG imports would grow by 280 percent in nine years, driven by the “dominant role” of conventional thermal power in generation.
BMI had noted that the Philippines was expected to import around 12 billion cubic meters of LNG by 2030. INQ
