Meralco mulls venture into gas business

MANILA, Philippines — Manila Electric Co. (Meralco) plans to put up gas plants as part of tying in all existing and planned energy businesses of the MVP Group of Companies.

“We don’t know yet, but I think we should get into the gas business,” Meralco chairman Manuel V. Pangilinan said, adding that the gas plants may rise in Quezon, Batangas, Zambales or Bataan.

“If Atimonan [One Energy Inc. (A1E)] is available as a site, it certainly is  a candidate. But we‘re looking at other sites like Batangas, where all of the gas plants are located, or should we build a new gas complex in Atimonan itself or build one in the west coast, Zambales, Bataan,” he said.

A1E, which is under Meralco’s power arm Meralco Powergen Corp., is the vehicle for the ultra-supercritical 2x600-megawatt (MW) coal-fired power plant which joined the power distributor’s latest competitive selection process (CSP), but failed to secure contracts.

The said power unit is still set to join another CSP scheduled this year.

Meralco’s planned gas plant would create a synergy with upstream oil and gas PXP Energy Corp., which has an economic interest of 77.66 percent in London-listed Forum Energy.

Forum Energy’s principal asset is a 70 percent interest in Service Contract (SC) 72 or Recto Bank, an 8,800-square kilometer offshore petroleum license situated west of Palawan Island in the West Philippine Sea, which contains the Sampaguita gas discovery.

“We hope that SC 72 could get developed as an oil field and once it starts developing, we have to connect to Malampaya because we need the facilities to process the raw gas then pipe it to Batangas, and Meralco should get into gas plants whether it’s in Batangas, in Atimonan or in Subic,” Pangilinan said.

Hong Kong-based First Pacific Co. Ltd. (FPC), Philex Mining Corp. and some banks made an offer to acquire the 45 percent stake of Shell Philippines Exploration B.V. (SPEX) in the Malampaya deep water gas-to-power project.

Pangilinan is the CEO and managing director of FPC, while he sits as chairman of Philex.

SPEX announced in September last year that it was exploring options to divest its interest in the Malampaya deep water gas-to-power project as part of its portfolio rationalization efforts.

Meralco’s prospective gas plants will also complement the operations of the Philippine Coastal Storage & Pipeline Corp. (PCSPC), which was partly acquired by another firm led by Pangilinan.

Last December, Pangilinan-led Metro Pacific Investments Corp. and Keppel Infrastructure Trust (KIT) signed an agreement with infrastructure fund Philippine Investment Alliance for Infrastructure (PINAI) to acquire the PCSPC.

As the country’s largest petroleum products import terminal, PCSPC provides clients with a well-connected distribution hub to the largest economic catchment area – Metro Manila and North and Central Luzon.

“As a stand-alone of business, it looks like it’s an attractive one because as I understand it, all of the refineries in this country have shut down,” Pangilinan said.