The UK-based BG Group is scouting for a potential buyer of its 40-percent equity in the two natural gas-fired power plants in Batangas, after the planned sale to Korea Electric Power Corp. (Kepco) was terminated.
“BG Group’s holding in these assets will continue to be classified as held for sale and treated as discontinued operations,” the company said in a regulatory filing.
The assets referred to the 1,000-megawatt Sta. Rita and 500-MW San Lorenzo natural gas power facilities in Batangas, which are both majority owned and operated by First Gas Power Corp. The two plants use the natural gas from the Malampaya gas field off northwest Palawan.
The Lopez-led First Gen Corp. owned 60 percent of First Gas Holdings, the parent company of First Gas Power, while the remaining 40 percent is held by the BG Group.
According to the BG Group, the proposed $400-million sale and purchase agreement with Kepco for the Sta. Rita and San Lorenzo power stations was terminated as certain consents and waivers were not received.
First Gen, in a previous disclosure to the local bourse, said the transaction between the BG Group and Kepco was “not in accordance with the requirements of the joint venture agreement.”
The Lopez firm also said Kepco was a direct and sole competitor in the natural gas-fired power generation business, as the South Korean company owns and operates the 1,200-MW Ilijan power plant, which also sources gas from Malampaya.
“We reiterate our previous pronouncements that First Gen and parent firm First Philippine Holdings Corp. continue to evaluate their rights and options in view of BG’s plan to divest its interests in the Sta. Rita and San Lorenzo gas-fired power plants,” First Gen said.
The options being evaluated by First Gen include the acquisition of the 40-percent stake held by BG through a separate partnership with another party.
Last year, First Gen Corp. chairman and CEO Federico Lopez disclosed that there were six foreign companies that had expressed interest in BG Group’s 40-percent stake in the natural gas power plants.