Japanese utility JERA to participate in LNG and infrastructure developments in the Philippines

Tuesday, 05 October 2021
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LNG News Editor:

JERA Co. Inc., the largest Japanese utility and liquefied natural gas importer, has decided to acquire a 27 percent stake in Aboitiz Power Corp. for $1.58 billion to partner with the major utility in the Philippines as the Asian nation builds out LNG and gas-fired power projects.

Aboitiz Power, listed on the Philippines Stock Exchange, is the holding company for the Aboitiz Group’s investments in power generation, distribution and retail electricity services.

Key supply areas

The company is one of the largest power producers in the Philippines with a balanced portfolio of assets located across the country and owns distribution utilities that operate in areas in Luzon, Visayas and Mindanao, including the second-biggest and third-biggest private utilities in the country.

JERA and Aboitiz Power are exploring a number of areas of collaboration including the potential joint development of power projects including LNG-to-Power and collaboration on new generation technologies,” said a statement.

“JERA has also signed a memorandum of understanding with Aboitiz Power to collaborate in fuel sourcing and management of the LNG required for potential LNG power plants which can supplement intermittent renewable energy,” stated JERA.

JERA as the largest Japanese LNG buyer has 35 million tonnes per annum of volumes and controls a fleet of 20 LNG carriers.

The company is Japan’s biggest fossil-fuel generator being owned jointly by Tokyo Electric Power Co. and Chubu Electric, the two largest power companies.

The joint venture company currently operates and provides fuel for a total of 26 power plants in Japan and imports LNG into 11 of Japan’s network of 37 terminals.

The move by JERA in the Philippines followed the announcement in September 2021 that with partner Tokyo Gas, the company had sold a combined 50 percent stake in a Mexican-based company operating five gas-fired power plants, including one close to the Gulf of Mexico LNG import terminal at Altamira.

The Mexican company, MT Falcon Holdings, owns the natural gas combined-cycle power plants located in northeast Mexico and Tokyo Gas and JERA have sold their respective 30 percent and 20 percent stakes.

Each power plant has had long-term power purchasing agreement with Mexico’s state-owned Federal Electricity Commission.

Both JERA and Tokyo Gas entered into sale and purchase agreements with Actis GP LLP, a London-based private equity firm with investments in global energy infrastructure.

The JERA asset sale to Actis GP is expected to be completed by the end of March 2022.

JERA said on its Aboitiz acquisition that the power group aims to expand power generation capacity to 9.2 gigawatts and achieve a 50:50 clean energy and thermal capacity mix by 2030 to meet the increasing demand for electricity in the future, while promoting renewable energy in the Philippines.

“At the same time, JERA is working to eliminate CO2 emissions from its domestic and overseas businesses by 2050 under its ‘JERA Zero CO2 Emissions 2050’ objective,” said the Japanese company.

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