PCC green lights $3.3-B LNG facility, with conditions

The Philippine Competition Commission (PCC) on Monday said it approved the $3.3 billion deal between the country’s three largest energy firms, paving the way for plans to establish what is considered to be the most extensive liquefied natural gas (LNG) facility in Batangas to move forward.

The government’s competition watchdog said it approved last Dec. 20 the transaction that involves Meralco PowerGen Corp. (MGen), Aboitiz Power Corp., and San Miguel Global Power Holdings Corp. (SMGP), with certain conditions set under a period of five years to prevent collusion or unfair practices.

Last March, MGen and AboitizPower said they will invest in SMGP’s 1,278-megawatt (MW) Ilijan gas-fired power plant and a new 1,320-MW facility slated for completion by the end of the year.

READ: Vires Energy drops LNG hub project in Batangas

The three companies will then acquire nearly 100 percent of the LNG import and regasification terminal owned by Linseed Field Power Corp., a local unit of global infrastructure firm Atlantic, Gulf & Pacific Co.

The three partners said that the facility will be used to receive, store and process LNG for the two power plants that supply electricity to Luzon.

“Key safeguards include PCC oversight of the competitive selection process to ensure power supply agreements are awarded through a transparent and competitive bidding process,” the PCC said in a statement.

“The acquired companies must also operate independently of their parent companies, with strict measures to separate information technology systems, offices and management to prevent coordination or undue influence,” it added.

Additionally, the PCC said that the boards of directors will also include independent members, and that internal trading units will operate independently of affiliates.

Further, power plants must submit reports on unplanned outages to the PCC within seven days of reporting to the Department of energy.

Moreover, competitive retail electricity market reports must also be shared with the PCC, the agency said.

“The parent companies are also required to appoint a competition compliance officer to monitor the fulfillment of these commitments,” the PCC said. —Alden M. Mozon