LNG

The Energy Regulatory Commission (ERC) of the Philippines has approved a five-month expansion of Meralco’s power purchase agreement (PPA) with First Gas Power Corp. The deal secures 1,000 MW of electricity supply from the Sta.Rita power plant in Batangas until June 25.

Prime Infrastructure Capital has completed its $850 million (PHP 50 billion) acquisition of a 60% stake in First Gen’s gas subsidiaries, giving it control of the Batangas LNG import terminal and more than 3,200 MW of gas-fired capacity.

First Gen is divesting 60 percent of its Philippine gas business to Prime Infra in a deal worth 500 billion Pesos (US$890m), covering controlling interests in BW Batangas FSRU, the proposed 1.2 GW Santa Maria power plant as well as the Santa Rita, San Sorenzo and Avion power plants (1,597 MW combined).

Santa Maria, a 1,200 MW combined-cycle power plant, will be fuelled via an interim offshore LNG terminal which is also part of the divested assets. Tokyo Gas had been contracted to supply an LNG cargo to First Gen in July 2024 which had been unloaded at the BW Batangas floating storage and regas unit (FSRU).

First Gen confirmed at the time it closed a tender for a cargo by awarding a contract to Tokyo Gas. Similar contracts were signed earlier with Shell Eastern LNG, Trafigura, TotalEnergies Gas and Power Asia and CNOOC Gas and Power Trading. The regasified LNG is designated for the First Gen Clean Energy Complex, comprising the Santa Rita, Avion and San Gabriel power plants.

The 1 GW Santa Maria CCGT used to supply baseload and mid-merit power to the Luzon grid. The Sta. Maria CCGT was initially meant to enter operations by the end of this year or early 2025, but the timeline slipped and First Gen now decided to divest its gas power assets altogether.

Following the sale, Prime Infra will hold the lion’s share of 60% in the Batangas-based gas power plants, with First Gen retaining the remaining 40%. The same equity split will apply to the LNG terminal, while Tokyo Gas of Japan will continue to hold a 20% stake.

Prime Infra already owns Prime Energy, the operator of the vast but depleting Malampaya gas field, which used to be a critical source of fuel for Luzon’s power generation.

First Gen Chairman and CEO Federico Lopez haled the deal as a “major step in our mission to forge collaborative pathways toward a decarbonized and regenerative future.” The partnership is meant to provide First Gen with more financial leeway to pursue its renewable energy projects.

As the largest renewable energy producer of the Philippines, First Gen covers about 18% pf the country’s electricity supply. Both First Gen and the media company ABS-CBN belong to the Lopez group of companies.

Vires Energy, affiliate of A Brown Co., has walked away from plans to build a floating LNG import terminal in the Philippines. Instead, it seeks to source gas from third parties to fuel its 500 MW barge-mounted power project.

Philippine National Oil Co. said it would be drawing up a short-list by the end of April for the development of a floating liquefied natural gas import terminal.