First Gen still keen on BG stake in plants

Lopez-led First Gen Corp. remains interested in acquiring the 40-percent stake of the British Gas (BG) Group in two natural gas-fired power plants in Batangas.

In an interview, First Gen president Francis Giles Puno explained that although First Gen continues to receive offers from other companies for a possible partnership to acquire BG’s 40-percent stake, the company was “still interested in acquiring it ourselves.”

“There are no discussions with the BG Group at this stage. We’re just waiting. For the moment, unless we come into an agreement, we’ll just continue to have them as our partners and they’re amenable to that… and also because there are other opportunities for growth for us,” Puno added.

The BG Group earlier inked a $400-million sale and purchase agreement with Korea Electric Power Corp. (Kepco) involving its 40-percent stake in the Sta. Rita and San Lorenzo power stations, which First Gen co-owns and operates.

The agreement with Kepco, however, was terminated early this year as certain consents and waivers were not received from the Lopez group.

First Gen, in a previous disclosure to the local bourse, pointed out that the transaction between the BG group and Kepco was “not in accordance with the requirements of the joint venture agreement.”

The Lopez firm further argued that Kepco was a direct and sole competitor when it comes to natural gas power facilities since the South Korean firm owns the 1,200-MW Ilijan power plant, which—like the Sta. Rita and San Lorenzo facilities—also sources gas from the Malampaya field off Palawan.

“The BG Group is now reviewing their options as well. (They’re saying that the 40 percent stake) is still a good investment for them so they’re saying unless some agreement is made, they also don’t mind being there long term,” Puno explained.