MANILA - Billionaire Enrique Razon's Prime Infra Holdings Inc on Thursday said it is working on acquiring a controlling stake in the Malampaya gas project from Davao-based businessman Dennis Uy.
In a statement, Prime Infra said the acquisition process has kicked off and will close subject to the consent of concerned parties including the Department of Energy and the Philippine National Oil Company Exploration Corp (PNOC-EC) as well as other regulatory and lending approvals.
Prime Infra did not say how large a share it is seeking from Uy's Udenna Corp, whose 90 percent stake in the gas project has been the subject of various controversies.
“Natural gas is a critical transition fuel and the modern, state-of-the-art infrastructure built to harness this valuable transition fuel attracted us to pursue this deal," said Prime Infra Chairman Enrique Razon Jr.
The ports and resorts billionaire said he hopes the deal will contribute to the country’s transition to more affordable and cleaner domestic energy sources like natural gas.
With Malampaya's service contract set to expire in 2024, Prime Infra said it is critical to apply for an extension to it can invest in expansion to sustain the economic and social benefits it provides for the country.
"The transition of the operations of Malampaya is critically urgent. Prime Infra and Udenna, as the new operators taking over from Shell Philippines, will need to immediately plan for the expansion to ensure the continuity of the production as long as the reserves support it," the company said.
Uy's Udenna Corp acquired the stakes of global oil firms Chevron and Shell, which brought the company's share in Malampaya to 90 percent.
Razon said it would be fitting for Filipino companies to control the critical power infrastructure.
“There is a sense of ownership to achieving national energy independence when you bring in Filipino companies to handle the reins of a critical power infrastructure and this is what Prime Infra aims to do with our participation in Malampaya," Razon said.
Malampaya supports up to 20 percent of the country’s electricity requirements.
"We will invest and sustain the development and production of domestic gas as long as the terms of the operating license and the natural resources permit,” he said.
Prime Infra said Udenna is "optimistic" about Razon's participation in Malampaya.
“We look forward to this opportunity to partner with Prime Infrastructure and PNOC EC, as we explore more ways to fulfill our common vision to make Malampaya sustain its capability to meet the urgent energy security need of the Philippines,” said Udenna Corporation Chairman and CEO Dennis Uy in the statement released by Prime Infra.
Besides Malampaya, Razon is also taking a stake in Uy's money-losing casino resort projects in Cebu and Clark.