Cover Three of the country’s top players in the energy industry Manuel V Pangilinan, Ramon S Ang, and Sabin M Aboitiz enter into an investment deal
Three of the country’s top players in the energy industry Manuel V Pangilinan, Ramon S Ang, and Sabin M Aboitiz enter into an investment deal
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Pushing the energy industry forward, Meralco PowerGen Corporation (MGen), Aboitiz Power Corporation (AP) and San Miguel Global Power Holdings Corporation (SMGP) entered into a groundbreaking venture towards a cleaner, and more sustainable future for the Philippines
Three of the country’s top power players in the private sector are finally working together on a US$3.3 billion deal, projected to provide the Philippines’ first and most expansive integrated liquefied natural gas (LNG) facility in Batangas.
“This initiative is seen to help boost energy security and steer the country towards a cleaner, more sustainable future in line with the Marcos administration’s push for more natural gas in the country’s energy mix,” as stated in the joint press release from MGen, AP, and SMGP.
“More importantly, this will make competitively priced and affordable power accessible to a broader base of Filipino consumers,” the statement continued.
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Above SMGP’s Ilijan LNG facility owned by Linseed Field Corporation (Photo: SMGP website)
SMGP’s Ilijan LNG facility owned by Linseed Field Corporation (Photo: SMGP website)
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The groundbreaking collaboration details MGen and AP’s investment in two of SMGP’s gas-fired power plants—the 1,278 MW Ilijan power plant and a new 1,320 MW combined cycle power facility, expected to begin operations by the end of 2024. The three esteemed companies will acquire the LNG import and regasification terminal owned by Linseed Field Corporation, the local unit of Atlantic Gulf and Pacific Co. (AG&P) operated by SMGP. This terminal will be used to receive, store and process LNG fuel for the two power plants, thus fully integrating the local energy sector into the global natural gas supply chain.
Eventually, the integrated LNG facility in Ilijan, Batangas is set to deliver over 2,500 MW. “This effort will not only meet the country's energy requirements but also support its environmental objectives by significantly lowering emissions,” the press statement wrote. The existing 1,278 MW power plant historically accounts for 10 to 12 per cent of Luzon’s net dependable power.
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Above Manuel V Pangilinan
Manuel V Pangilinan
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“This is a pathbreaking venture,” said MGen chairman Manuel V Pangilinan. “Apart from transforming the energy landscape of the Philippines, this symbolizes a milestone alliance among major players in the energy industry towards a more sustainable future. We are thrilled to have such reliable partners as we lay the foundation for a brighter, greener future.”
“Both LNG and renewables are needed to achieve a balanced energy mix and well-planned energy transition. Above all, this is a big win for the Philippines and the people. Economic development is impossible without energy security, and this investment is a definitive step forward in that direction," AP chairman Sabin M Aboitiz said.
For his part, SMGP chairman and president Ramon S Ang said, “For the first time, three leading power companies are working together to secure our country’s energy needs while transitioning towards cleaner power sources. This represents a major leap forward for our energy future, ensuring not just reliability but also cost-efficient power for many Filipinos.”
Multinational investment bank and financial services company UBS AG served as the financial adviser to MGen and AP on this transaction.
Above Ramon S Ang
Ramon S Ang
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The Department of Energy’s (DoE) Philippine Energy Plan identified LNG as “crucial for the country’s energy sustainability and security”. This is due to its projection of a 6.6 per cent annual increase in demand for stable and reliable electricity from 2020 to 2040. Hence, the department aims to boost natural gas’s share in the power generation mix by 26 per cent. As this project aligns with the government’s strategic vision of diversifying energy sources, it is deemed by the industry players as a huge leap, for the said national plan and the dynamics of the private sector.
Compared to traditional fossil fuels, LNG offers significant environmental advantages such as reduced greenhouse gas emissions, combating climate change, improving air quality, and enhancing public health.
Above SMGP’s Ilijan Power Plant in Arenas Point, Barangay Ilijan, Batangas City (Photo: SMGP 2019-2020 Sustainability Report)
SMGP’s Ilijan Power Plant in Arenas Point, Barangay Ilijan, Batangas City (Photo: SMGP 2019-2020 Sustainability Report)
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MGen already has a record in 2021 of 33 per cent gross capacity of energy supply using LNG technology, alongside coal (59 per cent), diesel (6 per cent), and solar (2 per cent). In 2022, MGen teamed up with foreign investors to develop offshore wind power projects. Meanwhile, SMGP in its 2020 sustainability report disclosed its hydroelectric power plants, circulating fluidised bed power plants, coal-fired thermal power plants and battery energy storage systems. Lastly, AboitizPower has a diversified portfolio of assets that features several renewable energy sources, such as geothermal, solar, hydropower, and wind.
“We are pleased to continue to diversify our generation portfolio and increase our capability in the delivery of energy security in the Philippines through a minority share in the first integrated LNG facility in the country. Its importance in keeping the lights on cannot be understated,” said AP president and CEO Emannuel Rubio.
“In an energy transition characterised mostly by the influx of variable renewable energy, the inclusion of LNG plants supports our pragmatic approach. As a transition fuel, LNG will complement the variabilities of solar and wind power generation, helping maintain the stability of the aggregate supply and the whole power system,” he added.
Above Sabin M Aboitiz
Sabin M Aboitiz
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“The collaboration among the three power companies represents a shared commitment to innovation, reliability, and environmental stewardship in the energy sector,” the joint statement wrote.
When this project becomes fully operational, dependable and competitively-priced energy is guaranteed, significantly aiding the economy and impacting the environment.
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Before assuming the Art and Culture Editor position, Franz has always had a penchant for visual and performing arts. He is passionate about exploring and writing about the local cultural scene and rediscovering the country’s storied past and rich heritage. Besides working on this luxury lifestyle magazine, Franz is an avid book reader, local traveller, museum-goer, chorister, and community theatre playwright.
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Franz earned a degree in Journalism from the University of Santo Tomas. He writes about local visual and performing artists and their craft; drinks wines, liquors, and spirits and talks about the creativity of their respective winemakers and master blenders; tries to learn more about business and investments; respects the tradition and artistry that go behind the making of watches and jewellery; and appreciates the genius of architecture and creative design.
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