First Pac, MGen explore options for LNG power plant in Singapore

MANILA, Philippines — First Pacific Co. Ltd. and MGen, the power generation arm of Manila Electric Co. (Meralco) are exploring options for their LNG power plant in Singapore given the challenging environment for power players in the Southeast Asian country.

Metro Pacific Investments Corp. (MPIC) chief financial officer David Nicol said while Singapore’s economy is growing, demand for power isn’t growing as fast as industry players had expected.

He said there is a surplus of power capacity in Singapore which has made the project less viable.

“We might try to merge (with other companies). We are open to business combination,” he said.

There are already some discussions now with potential partners as well as advisors to handle the transaction, if ever.

Options include partnering with other companies or just selling its stake in the plant, but Nicol stressed there has been no final decision yet.

In 2013, First Pacific and MGen formed FPM Power Holdings to acquire a 70 percent interest in GMR Energy (Singapore) Pte Ltd. which owned a 2x400MW LNG power plant in Singapore.

GMR Energy (Singapore) Pte Ltd. was renamed PacificLight Power Pte Ltd. and the name of its wholly owned retail company, GMR Supply (Singapore) Pte Ltd. changed to PacificLight Energy Pte Ltd. marking the entry of the new owners.

Proponents poured in $488 million in cash, with an additional $49 million equity contribution into the project.

The facility, located on Jurong Island, started commercial operations in the first quarter of 2014, making it the first power plant in Singapore fully fuelled by LNG – natural gas that has been converted into liquid form – instead of piped natural gas in response to the Singapore government’s policy to diversify its energy sources.

The project was supposed to complement MGen’s existing greenfield project developments in the Philippines and was intended to be part of efforts to be a regional player in the power industry. It was also envisioned to provide LNG combined cycle power plant technology transfer to the country.