MPIC buys Philippine Coastal Storage & Pipeline

MANILA, Philippines — The group of corporate tycoon Manuel V. Pangilinan is betting on the petroleum storage and import business amid changes in the local oil industry where oil firms have now been shutting down their respective refineries.

Metro Pacific Investments Corp., the Pangilinan-led infrastructure and tollways conglomerate, and Keppel Infrastructure Trust (KIT) signed an agreement with infrastructure fund Philippine Investment Alliance for Infrastructure (PINAI) to acquire the Philippine Coastal Storage & Pipeline Corp. (PCSPC), the largest petroleum products import terminal in the Philippines.

It provides clients with a well-connected distribution hub to the largest economic catchment area – Metro Manila and North and Central Luzon.

MPIC will initially hold a 20 percent stake in Philippine Tank Storage International Holdings Inc. (PTSI), the parent firm of PCSPC, for a purchase price of $67 million.

MPIC and KIT are also in discussions to give MPIC the option to increase its stake to 50 percent.

Through this investment, MPIC will be able to diversify its portfolio and revenue streams in a new industry vertical with strong growth potential.

PCSPC generates stable cash flows via take-or-pay contracts with high quality off-takers, said Pangilinan, chairman of MPIC.

“With PCSPC accounting for 36% of the total import terminal storage requirements of the Philippines, MPIC sees this facility as vital energy infrastructure for the country,” Pangilinan said.

MPIC and KIT look forward to further expanding the capacity of PCSPC to provide millions of Filipinos with added energy security.

Matthew Pollard, CEO of Keppel Infrastructure Fund Management Pte Ltd, the trustee-manager of KIT, said the strategic acquisition of PCSPC would allow KIT to diversify, grow and strengthen the resilience of KIT’s distributable cash flow.

“As the largest petroleum products import storage facility in the Philippines, where demand for petroleum products is expected to grow, PCSPC presents an attractive opportunity for KIT to capture opportunities arising from the strong macroeconomic outlook as well as robust growth fundamentals for imported petroleum products in the Philippines,” Pollar said.

The new business would expand MPIC’s portfolio which includes power, toll roads, water, logistics, healthcare and light rail.