Prime Infrastructure Capital has closed a 50-billion-peso ( $850 million ) financing deal to acquire stakes in and operate the gas assets of clean energy provider First Gen Corp in Batangas City. 

Prime Infra is the infrastructure arm of the Razon Group, investing in, developing, and operating critical assets in essential sectors such as sustainable energy, water, and waste management. Among its assets are Manila Water Company, Prime Energy, the operator of the Malampaya deep-water gas-to-power project, and Prime Waste Solutions.

Following financial close, Prime Infra now owns a 60% controlling stake in the 1,000-megawatt Santa Rita Power Plant, the 500MW San Lorenzo Power Plant, the 450MW San Gabriel Power Plant, the 97MW Avion Power Plant, and the proposed 1,200MW Santa Maria Power Plant. First Gen retains a 40% stake in these gas assets. 

Prime Infra also now controls 60% of an offshore liquefied natural gas ( LNG ) terminal, with 20% owned by First Gen and 20% by Tokyo Gas.

Accelerating transition

Prime Infra president and chief executive officer Guillaume Lucci says the strategic partnership with First Gen will support energy security and the growth of sustainable energy in the Philippines. 

“These gas-fired power plants have played a critical role in supporting the Philippine economy and advancing the decarbonization of our energy mix,“ says Lucci.  “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 also highlights the synergy of the gas assets with Prime Infra subsidiary Prime Energy Resources Development, operator of the Malampaya deep-water gas-to-power project, the country’s only domestic gas field. Together with the Malampaya consortium, Prime Energy is undertaking Phase 4 drilling and exploration to maximize the country’s gas resources. 

“With this transaction, our Prime Infra assets are now fully connected across the energy value chain, from upstream to midstream to downstream,” he adds.

First Gen is the publicly listed power generation company of the Lopez Group. Aside from its newly established partnership with Prime Infra in natural gas, First Gen operates the country’s largest portfolio of renewable energy, which includes geothermal, hydro, wind, and solar power. Through its geothermal power unit Energy Development Corporation, it is also developing geothermal prospects in Indonesia in partnership with PT DSSR Daya Mas Sakti, a subsidiary of the Sinar Mas group.

Prime Energy operates the Malampaya gas field together with its SC 38 Consortium partners Prime Oil & Gas, UC38 LLC, and state-owned PNOC Exploration Corporation.  

The SC 38 Consortium is investing US$893 million in the ongoing Malampaya Phase 4 ( MP4 ) drilling campaign, the largest upstream investment in the Philippines in over a decade. First gas extraction is targeted by 2026. 

National policy

The investment is aligned with the national policy direction under the Philippine Natural Gas Industry Development Act, which directs the exploration, development, and utilization of domestic gas resources to lessen dependence on volatile global markets and ensure stable energy supply. 

Since beginning operations in 2001, the Malampaya gas field has supplied up to 40% of Luzon’s energy demand.

The Phase 4 project covers the drilling of three new wells, namely Camago 3, Malampaya East 1, and Bagong Pag-asa 1, to prolong the life of the gas field. 

Under the Philippine Energy Plan, the country aims to increase the share of renewable energy in its power generation mix to 30% by 2030 and 50% by 2040. Natural gas power plants complement this transition, operating with the daily intermittency of most renewable energy sources and emitting approximately 50% less carbon dioxide than coal-fired electricity generation.