Magnate Enrique Razon Jr. is buying a majority share of Dennis Uy’s Udenna Corp. in the Malampaya gas field, Razon’s infrastructure business Prime Infra Holdings Inc. said Thursday.
“The acquisition process has kicked off and will close subject to the consent of various parties including the Department of Energy (DOE) and the Philippine National Oil Company Exploration Corporation (PNOC-EC). The transaction will also go through other regulatory and lenders’ approvals within that period,” Prime Infra said in a statement.
Prime Infra has yet to provide financial details of the transactions, but said it would have a controlling stake in the Malampaya gas field.
Razon’s firm said its entry into the Malampaya gas field project aims to infuse investments in the country’s critical source of power.
“Malampaya’s service contract is set to expire in 2024 making it critical for Prime Infra’s entry to be able to continue operating the project while applying for an extension so it can invest in its expansion, which will sustain the economic and social benefits that Malampaya is providing for the country,” Prime Infra said.
It added that the transition of Malampaya’s operation is “critically urgent” for Prime Infra and Udenna to plan for the expansion of the gas field to ensure that it will continue to produce natural gas to support the country’s power needs.
“Natural gas is a critical transition fuel and the modern, state-of-the-art infrastructure built to harness this valuable transition fuel attracted us to pursue this deal – all aspects of the project ticks off our environmental, social, and governance (ESG) check list that will allow us to contribute more to the country’s transition from expensive and volatile coal and imported fuel prices to affordable cleaner and domestic energy resources like natural gas,” said Razon, the chairman of Prime Infra.
In 2019, Udenna acquired the 45-percent share of Chevron Malampaya LLC through its subsidiary UC Malampaya Pte. Ltd. After two years, another unit of Udenna, Malampaya Energy, bought a 45 percent stake of Shell Philippines Exploration B.V.
Udenna’s buyout of shares of Chevron and Shell in Malampaya has been a subject of a Senate inquiry last year, which the DOE said is causing delays in the work program in Malampaya and putting energy security at risk.
“(T)here is a sense of ownership to achieving national energy independence when you bring in Filipino companies to handle the reins of a critical power infrastructure and this is what Prime Infra aims to do with our participation in Malampaya. We will invest and sustain the development and production of domestic gas as long as the terms of the operating license and the natural resources permit,” Razon added. (PNA)