Chevron selling 45% stake in Malampaya

Iris Gonzales (The Philippine Star) - November 11, 2019 - 12:00am

MANILA, Philippines — Chevron is selling its 45 percent stake in the $4.5 billion Malampaya deep water-gas-to-power project and has reportedly closed a preliminary deal with Dennis Uy’s Udenna Corp., industry sources said.

Sought for confirmation, Uy said yesterday he cannot comment on the matter yet, but confirmed that Udenna was indeed looking at it.

“We cannot say anything about it now. We cannot comment yet,” said Uy who has been transforming his Phoenix Petroleum into a major energy player.

However, Uy confirmed that his group was looking at the Chevron stake in Malampaya as another possible investment.

Energy Secretary Alfonso Cusi confirmed that Chevron was indeed in talks with buyers for the sale of its stake in Malampaya, but has not updated the Department of Energy on the closing of such a transaction.

“They have been in talks with buyers but we have not been informed yet of the conclusion,” Cusi said.

Asked if he preferred a local or a foreign buyer for Chevron’s stake, Cusi said it does not matter.

“Well, the buyer has to be credible. We don’t have a preference but as long as the buyer could really advance the project,” Cusi said.

Uy said that his investment in Malampaya would not be in conflict with his plan to partner with China National Offshore Oil Corp. to put up an LNG terminal in Batangas.

Phoenix announced in January that Tanglawan Philippine LNG Inc., its joint venture firm with CNOOC, will build an LNG terminal in Batangas with a capacity of 2.2 metric tons per annum.

Tanglawan expects to commence commercial operations in 2023. It is also targeting to develop a gas-fired power generation facility with an installed capacity of up to 2,000 megawatts in the long term, according to Phoenix.

Uy has been advocating the use of natural gas in coal-denominated Philippines as an additional source of power.

“Natural gas is abundant in many countries and regions across the globe – in the United States, Russia, Africa, Oceania, and Southeast Asia. Having multiple sources allows us the security of enjoying a steady supply, even if one or some should become unavailable. Such sustainability has drawn many nations to the appeal of LNG,” Uy said.

The Malampaya project is developed and operated by Shell Philippines Exploration BV with a 45-percent stake on behalf of joint-venture partners Chevron which also has  a 45-percent stake and PNOC-EC (Philippine National Oil Co.-Exploration Corp.), which holds the remaining 10 percent.

Supply from the Malampaya gas field is projected to be depleted by early 2022 or latest by 2027.

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