The Department of Energy said Monday it approved the transfer of the shares of Shell Philippines Exploration B.V. in the Malampaya natural gas project to a subsidiary of Prime Infrastructure Capital Inc.
Prime Infra, the infrastructure arm of businessman Enrique Razon Jr., said in a statement this marks the initial foray of the company into the upstream energy market and fulfills its purpose to make better lives and resilient economies through critical infrastructure.
Energy Secretary Raphael Lotilla said the agency approved the sale of the 45-percent stake of Spex in the Malampaya gas project in northwest Palawan to Prime Infra. Spex is also the operator of the natural gas project.
Prime Infra’s Prime Exploration Pte. Ltd. signed in July this year a share purchase agreement acquiring MEXP Holding Pte. Ltd.
MEXP previously signed a deal to acquire 100-percent shares of SPEX, which the DOE recently approved. Prior the DOE approval, the joint venture partners in the Malampaya SC38 consortium―UC38 LLC and PNOC Exploration Corp―gave their consents on the transaction.
“We welcome DOE’s thorough review and subsequent approval of the SPEX sale given the urgency to sustain the operations of Malampaya―a vital energy installation and symbol of national pride―and to plan for the further development of the existing reserves in light of the current power under supply. We will contribute by doing all that can be done to produce as much gas as possible to sustain production in support of the power demand in Luzon,” said Razon, who serves as chairman of Prime Infra.
Prime Infra president and chief executive Guillaume Lucci said the company’s energy portfolio is aligned with the national government’s objective towards attaining energy independence and security, while reducing the country’s reliance on fossil fuels.
“Prime Infra is well-positioned to carry on the world renowned track record of the Malampaya asset and therefore, the next urgent step for the company is to sustain and expand gas production while we promptly address the license extension for SC38,” said Lucci.
Prime Infra said it would assume full ownership and control of SPEX once the transition process for a safe and seamless handover of operations from Shell is completed by Nov. 1, 2022 as targeted.
Prime Infra said it would deliver outstanding operational performance and further the potential of SC38 covering the Malampaya deep-water gas-to-power project to ensure continuity of production as long as the reserves support it.
Prime Infra focuses on building assets that support the most urgent sustainability priorities―energy, access to clean water, waste management and viable critical infrastructure.
The Malampaya project is one of the country’s most important power assets, as it produces natural gas to power plants in Batangas City that power up to 20 percent of the Luzon’s total electricity requirements.
It began operations in 2001, with the consortium’s license for the project set to expire in 2024.
