MANILA -- Philippine power giants Meralco PowerGen Corporation (MGen), Aboitiz Power Corporation, and San Miguel Global Power Holdings Corp. (SMGP) are forging a $3.3 billion deal to jointly launch the country's first and most expansive integrated liquefied natural gas (LNG) facility.

Under the deal, businessman Manny Pangilinan's MGen and Sabin Aboitiz's Aboitiz Power will invest in San Miguel's two gas power plants: the 1,278 megawatt (MW) Ilijan power plant, and a new 1,320 MW combined cycle power facility expected to start operations by the end of 2024.

SMGP is owned by tycoon Ramon Ang.

The three will then acquire nearly 100 percent of the LNG import and regasification terminal owned by Linseed Field Corporation, which received the country's first LNG cargo delivery ever in April 2023.

This 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, San Miguel said in a statement.

The deal is expected to increase the country's power supply with over 2,500 MW of generation capacity once fully operational.

"This effort will not only meet the country's energy requirements but also support its environmental objectives by significantly lowering emissions," San Miguel said in a statement.

Pangilinan said the deal is a "pathbreaking venture," which will transform the Philippine energy landscape.

Aboitiz, meanwhile, said that this investment is a definitive step towards energy security, which will boost the Philippines' economic growth.

For his part, Ang said the move will ensure reliable and cost-efficient power for many Filipinos.

"The deal aligns perfectly with the push towards diversifying energy sources through the increased use of cleaner natural gas," he said.

SOLUTION TO BROWNOUT?

Energy consumer group ILAW meanwhile said it hopes that the joint venture between the Philippines’ three power giants will address the country's energy supply problems. 

“Knowing that these three companies are working together, gives us hope that they are working towards a solution na ‘yong mga problema natin sa kakulangan ng kuryente lalo na doon sa mga areas na laging nagba-brownout, magkakaroon na na tayo ng solusyon,” Convenor Agnes Garcia told ABS-CBN News.

Garcia added that the LNG facility will be another energy source with the dwindling supply of the Malampaya gas field.

While LNG is still not a sustainable source of energy, including LNG in the generation mix is a “bridging tool” to renewable energy, Garcia said.

“The goal here is to get our country to solar, wind, and hydropower,” she added. 

Garcia stressed that energy security should be prioritized and having multiple sources of energy will eventually pave the way for cheaper energy. 

Under their Philippine Energy Plan, the Department of Energy hopes to boost natural gas's share in the power generation mix to 26 percent by 2040.

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