Tycoons Pangilinan, Ang, and Aboitiz Finalize Landmark $3.3-Billion LNG Deal

MANILA – The joint acquisition deal for a liquefied natural gas (LNG) terminal involving the country's largest power firms owned by tycoons Manuel V. Pangilinan, Sabin Aboitiz, and Ramon S. Ang has reached a financial close.

In a disclosure to the stock exchange on Tuesday, Manila Electric Company said its wholly owned subsidiary Meralco PowerGen Corporation (MGEN), together with San Miguel Global Power Holdings Corp. (SMGP), and Aboitiz Power Corporation through its subsidiary, Therma NatGas Power Inc. (TNGP), completed the financial close of the USD3.3-billion partnership.

The deal involves the acquisition of a 67-percent stake by Chromite Gas Holdings, Inc. (CGHI) from SMGP in South Premiere Power Corp. (SPPC), Excellent Energy Resources Inc. (EERI), and Ilijan Primeline Industrial Estate Corp. (IPIEC).

Chromite is a 60-40 percent joint venture between MGen and Therma Natgas Power Inc.

Chromite and SMGP are also acquiring 100 percent of Linseed Field Corp. (LFC) to operate an LNG terminal in Batangas City.

As a result of the acquisitions, MGen and TNGP, through their 60-40 stakes in CGHI, will own 67 percent of SPPC, EERI, and IPIEC, while SMGP retains a 33-percent stake in these entities and gains a corresponding interest in LFC.

The landmark transaction received regulatory approval from the Philippine Competition Commission (PCC) late last year, ensuring compliance with fair competition laws and economic policies. In December last year, the PCC approved the acquisition deal, noting that it is critical for strengthening the country’s energy supply and is subject to conditions aimed at ensuring fair competition and promoting transparency.

The PCC, however, identified competition concerns such as risks of coordination in the national power generation market and foreclosure in power supply deals with distribution utility companies. The involved firms submitted voluntary commitments to address the competition issues, which were reviewed and validated with input from industry players, stakeholders, the Department of Energy (DOE), and the Energy Regulatory Commission.

Strengthening the Philippines’ Energy Landscape

The finalized agreement aligns with the government’s push for cleaner energy alternatives and reduced dependence on coal-fired power plants. With the country’s increasing need for sustainable energy sources, LNG has emerged as a vital component in the transition toward a more resilient and environmentally friendly power sector.

The two gas-fired power plants included in the investment plan will play a critical role in stabilizing energy supply, particularly in Luzon, where demand continues to grow. These facilities are designed to enhance energy reliability, reduce carbon emissions, and support economic growth by providing a consistent power source for industries and consumers alike.

Key Implications of the Deal

• Energy Security: The investment in LNG infrastructure aims to ensure a steady supply of electricity, reducing dependence on imported fossil fuels and mitigating the risks of power shortages.

• Economic Growth: The large-scale project is expected to generate jobs, boost local industries, and attract further investments into the Philippine energy market.

• Environmental Sustainability: The shift to LNG is in line with the country’s long-term strategy of integrating cleaner energy sources and reducing greenhouse gas emissions.

Safeguard Measures Implemented

To prevent potential market collusion and ensure fair competition, the PCC has mandated specific safeguard measures, including:

• PCC oversight of the competitive selection process to prevent collusion.

• Submission of power plants’ unplanned outages reports to the PCC within seven days after reporting to the DOE.

• Appointment of a competition compliance officer to ensure adherence to the commitments made by the involved firms.

Industry Leaders Driving the Future of Energy

With their combined expertise and resources, Pangilinan, Ang, and Aboitiz continue to reshape the energy landscape of the Philippines. Meralco PowerGen, Therma Natgas, and San Miguel Global Power are poised to play pivotal roles in ensuring a stable and competitive energy market for the nation’s future.

As the energy transition gains momentum, this $3.3-billion LNG deal stands as a testament to the private sector’s commitment to innovation and progress in addressing the Philippines’ growing energy needs. The success of this collaboration is expected to set a precedent for future investments in cleaner and more sustainable power generation projects in the country.