Three Tycoons Seal $3.3 Billion Deal for Philippines’ Largest LNG Facility
- May 20, 2024
Power giants unite in a monumental $3.3 billion energy pact to launch a groundbreaking LNG facility in the Philippines, shaping a cleaner energy landscape.
Three tycoons have sealed a $3.3 billion deal for the Philippines’ largest liquefied natural gas (LNG) facility.
Power giants Meralco PowerGen Corp. (MGen), Aboitiz Power Corp., and San Miguel Global Power Holdings Corp. (SMGP) have joined forces in a groundbreaking agreement to launch the facility in Batangas province.
The collaboration, hailed as a landmark move, involves a joint investment by MGen and AboitizPower in SMGP’s existing 1,278-megawatt (MW) Ilijan gas-fired power plant, along with the construction of a new 1,320-MW facility expected to be completed by year-end. Additionally, the trio will acquire nearly full ownership of the LNG import and regasification terminal previously held by Linseed Field Power Corp.
Ramon Ang, chair and president of SMGP, emphasized the significance of this partnership, stating, “For the first time, three leading power companies are working together to secure our country’s energy needs while transitioning toward 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.”
Despite concerns about LNG emissions, the initiative aligns with the government’s strategy of using LNG as a transitional fuel during the shift towards renewable energy sources. Once fully operational, the facility is expected to significantly bolster the country’s power supply by over 2,500 MW.
Sabin Aboitiz, chair of AboitizPower, emphasized the importance of a balanced energy mix, stating, “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.”
With electricity supply constraints looming, particularly exacerbated by El Niño, industry leaders see the Ilijan power plant as a solution to alleviate demand pressures. Notably, the facility resumed operations in April 2023 after being offline since June 2022 due to a supply halt from the Malampaya gas field.
The Department of Energy (DOE) aims for renewables to comprise 35% and 50% of the energy mix by 2030 and 2040, respectively. However, achieving this goal will require substantial investments totaling P5.8 trillion in renewable energy projects.
This historic collaboration marks a pivotal shift towards sustainable energy practices, signaling a brighter and cleaner energy future for the Philippines.
