A group of companies led by business tycoon Manny V. Pangilinan have formally submitted an offer to acquire 45% of the Malampaya gas-to-power project being sold by Shell Philippines Exploration B.V. (SPEX).
Pangilinan said the consortium led by First Pacific Co. Ltd. and Philex Mining Corporation have submitted a final non-binding offer to acquire the shares of SPEX in the $4.5 billion project off the coast of Palawan.
First Pacific directly and indirectly controls 25.48% of Philex, which in turn owns the 30.4% controlling interest in PXP Energy. Pangilinan, who is First Pacific’s managing director and CEO, is also Philex and PXP Energy’s chairman.
PXP Energy, through London-listed subsidiary Forum Energy Ltd., currently holds Service Contract (SC) 72 in the hotly-contested West Philippine Sea, particularly in the Recto Bank. SC72 holds the Sampaguita gas discovery and is close to the Malampaya project.
Pangilinan said that once SC72 gets developed into an oil field, they would connect it to Malampaya to process the raw gas before using the existing pipes to transport the fuel to the five power plants in Batangas that it is already connected to.
PXP Energy can then make use of the Malampaya project to bring gas from its exploration platforms to end-users, if containing natural gas for commercial uses becomes successful.
SPEX announced in September 2020 that it was eyeing the sale of its stake in Malampaya as part of Shell’s changing business strategy in the Philippines. Pangilinan, along with San Miguel Corporation’s Ramon Ang and Udenna Corporation’s Dennis Uy, have since then expressed interest to buy Shell’s share.
Udenna already owns the other 45% after purchasing it from Chevron in March last year. The government, through PNOC-Exploration Corporation, owns the remaining ten percent.
Malampaya’s natural gas reserves, which first flowed in 2001, are expected to be depleted by 2027. SC38 of the Malampaya consortium will expire in 2024.
Photo credit: Philstar.com