Energy giants see no hitches in securing PCC okay for LNG deal

By Lisbet K. Esmael @lisbetesmael – Aug. 2, 2024
from Philippine Daily Inquirer

The country’s three energy powerhouses hope to receive within the third quarter a nod from the Philippine Competition Commission (PCC) for their $3.3-billion deal, which targets to launch the “most expansive” liquefied natural gas (LNG) facility in Batangas.

It was in March when Meralco PowerGen Corp. (MGen), Aboitiz Power Corp. and San Miguel Global Power Holdings Corp. (SMGP) joined hands for a landmark agreement that aims to bolster energy security while delivering “cost-efficient” power to consumers.

Emmanuel Rubio, president and chief executive of MGen, said the approval from the competition watchdog is expected “by around September.”

“We don’t see any issues with receiving the approval,” he told reporters in a recent interview, adding: “So that’s just the main trigger for us to take over or for the joint venture to actually commence.”

Once the PCC approves the deal, the official said the next step would be financial closing, which is also eyed for completion this year.

Under the deal, MGen, the power generation arm of Pangilinan-led Manila Electric Co., and AboitizPower would jointly invest in SMGP’s 1,278-megawatt (MW) Ilijan gas-fired power plant and a new 1,320-MW facility seen to begin operations by the end of the year.

The three companies would 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. that received the country’s first LNG cargo delivery in April 2023. The facility would be used to receive, store and process LNG fuel for the two power plants.

According to Rubio, their power supply agreement (PSA) already secured provisional approval to get supply from the Ilijan power plant, albeit covering only 910 MW. A motion for clarification on the supply of just 910 MW was also filed, he said.

Asked for updates on the Energy Regulatory Commission’s review of the potential impact of the deal on consumers, chair and CEO Monalisa Dimalanta said the evaluation was “still ongoing.”

Earlier this year, ERC and PCC said they would closely collaborate “to monitor and investigate allegations of anticompetitive practices in the power sector.”