Aboitiz, Tanduay units team up for $47-M biomethane project

MANILA, Philippines - The joint venture of the Aboitiz Group and Gazasia Ltd. of the United Kingdom is partnering with a subsidiary of Tan-led Tanduay Distillers Inc. for a $47-million biomethane project.

This development formalizes the entry of the Aboitiz Group into the alternative fuel sector through Aseagas Corp.

“We have signed already an agreement with Absolut Distillery...We’re going to produce methane from their waste,” Aboitiz Equity Ventures Inc. (AEV) chief finance officer Stephen Paradies told reporters yesterday.

“Our budget there is $47 million. That includes land and plant equipment,” he said.

Last year, AEV signed a memorandum of agreement with Gazasia to jointly develop, construct and operate plants that will convert organic waste into carbon-neutral, sustainable and renewable fuel for vehicles in the form of liquid biomethane.

It would take 18 months to complete the facility in Batangas, Paradies said, adding that the company is already finalizing the land purchase.

“We will sell this in bulk to the companies that have fleet of vehicles like buses and trucks,” Paradies said. The facility will have an annual capacity of 8,000 metric tons of biomethane, which can help fuel 200 buses or heavy trucks per year.

The plant will is expected to produce liquid biomethane (LBM) fuel. The LBM process takes methane from landfills or organic waste like distillery effluent, cleans the gas then liquefies this into fuel for vehicles similar in specification to liquefied natural gas but made from 100 percent organic material.

Aseagas, an alternative fuel company that provides waste-to-fuel solutions, is one of the new investments of AEV.

“This is will be used to refinance our existing debts,” Paradies said, adding that excess capital will be used should the company win the auction for infrastructure ventures like the 27.5-kilometer Cavite-Laguna Expressway and the P17.5-billion Mactan-Cebu International Airport project.

In nine months this year, AEV’s consolidated net income slipped eight percent to P16.6 billion from P18.0 billion amid the decline in selling prices of electricity and the revaluation of its dollar-denominated liabilities.

Adjusting for non-recurring items, AEV’s core net income fell seven percent to P16.4 billion.