Prime Infrastructure seals P50 billion First Gen gas takeover

MANILA, Philippines — Prime Infrastructure Capital Inc. of tycoon Enrique Razon Jr. has completed its P50-billion takeover of the Lopez Group’s gas business, strengthening its foothold in the country’s natural gas sector.

Prime Infra and Lopez-led First Gen Corp. has reached financial close for the transaction, which is seen to rival the $3.3-billion power venture sealed in January by business titans Manuel V. Pangilinan, Ramon Ang and Sabin Aboitiz.

After the deal’s closing, Prime Infra now owns 60 percent of four existing gas-fired facilities totaling over 2,000 megawatts and the proposed 1,200-MW Santa Maria gas plant in Batangas, while First Gen retains a 40-percent interest.

Prime Infra also commands a 60-percent stake in an offshore liquefied natural gas terminal in Batangas, with First Gen and Japan’s Tokyo Gas each holding 20 percent.

“With this transaction, our Prime Infra assets are now fully connected across the energy value chain, from upstream to midstream to downstream,” Prime Infra president and CEO Guillaume Lucci said.

The Malampaya deep water gas-to-power project, an indigenous gas resource in offshore Palawan operated by Prime Infra unit Prime Energy, has been supplying fuel to the Batangas plants for years.

“Our goal is to continue growing this platform together with First Gen to accelerate the country’s transition away from a power system that is still coal-dependent,” Lucci said, highlighting the synergy of the gas assets with Prime Energy.

Together with the Malampaya consortium, Prime Energy recently launched an $893-million drilling and exploration project to maximize the country’s indigenous gas resources.

The multibillion-peso deal with Prime Infra is expected to give First Gen a strong financial boost to fuel the expansion of its renewable energy portfolio while keeping a strategic presence in the gas sector.

“This partnership marks not just a new chapter but a renewed commitment to the work that powers this nation every day, to grow our gas platform responsibly, to strengthen our country’s energy security and to help ensure that the Philippines transitions to clean energy,” First Gen president and COO Francis Giles Puno said.

Natural gas, which produces fewer carbon emissions than other fossil fuels, is considered a transition fuel to help the Philippines move away from coal while paving the way for broader adoption of renewable power.

Latest Department of Energy data showed that natural gas accounted for around 14 percent of the country’s power generation mix in 2023.

Coal still held the largest share of the energy pie at 63 percent, with renewables making up only 22 percent.