PRIME Infra Holdings Inc., Enrique Razon Jr.’s critical infrastructure arm, is poised to acquire a controlling stake in businessman Dennis Uy’s Udenna-led Malampaya deep-water gas-to-power project, one of the biggest and most successful, commercial gas finds in the Philippines.
The acquisition process has kicked off and will close subject to the consent of various parties, including the Department of Energy (DOE) and the Philippine National Oil Company Exploration Corp. (PNOC-EC).
The transaction will also go through other regulatory and lenders’ approvals within that period.
The Malampaya deep-water gas project ushered the natural gas industry into the Philippines. It supports up to 20 percent of the country’s electricity requirements using indigenous resources of natural gas, the cleanest burning hydrocarbon, and reduces the need for imported oil.
Phases 2 and 3 have sustained levels of gas production in recent years, helping to maintain national energy security.
The entry of Prime Infra into the natural gas industry aligns with its purpose to create better lives and resilient economies through critical infrastructure coupled by its aspiration to help its customers’ transition to cleaner energy resources to fuel the economic growth of the Philippines.
Malampaya’s service contract is set to expire in 2024, making it critical for Prime Infra’s entry to be able to continue operating the project while applying for an extension so it can invest in its expansion, which will sustain the economic and social benefits that Malampaya is providing for the country.
The transition of the operations of Malampaya is critically urgent. Prime Infra and Udenna, as the new operators taking over from Shell Philippines, will need to immediately plan for the expansion to ensure the continuity of the production as long as the reserves support it.
“Natural gas is a critical transition fuel and the modern, state-of-the-art infrastructure built to harness this valuable transition fuel attracted us to pursue this deal -- all aspects of the project ticks off our environmental, social, and governance (ESG) check list that will allow us to contribute more to the country’s transition from expensive and volatile coal and imported fuel prices to affordable cleaner and domestic energy resources like natural gas,” said Prime Infra chairman Enrique Razon Jr.
“Also, there is a sense of ownership to achieving national energy independence when you bring in Filipino companies to handle the reins of a critical power infrastructure and this is what Prime Infra aims to do with our participation in Malampaya. We will invest and sustain the development and production of domestic gas as long as the terms of the operating license and the natural resources permit,” Razon added.
Udenna Corp. is optimistic about the participation of Razon Group in Malampaya, further strengthening the capability of Filipino-run companies to meet the power demand that picked up after Covid-19 restrictions were lifted resulting in the resumption of economic activities.
“We look forward to this opportunity to partner with Prime Infrastructure and PNOC-EC, as we explore more ways to fulfill our common vision to make Malampaya sustain its capability to meet the urgent energy security needs of the Philippines,” said Udenna Corp. chairman and chief executive officer Dennis Uy. (PR)