Thursday, April 27, 2017

First Gen wants to partner with PNOC for LNG terminal

By Lenie Lectura - April 26, 2017

LOPEZ-LED First Gen Corp. has formally expressed interest to partner with state-run Philippine National Oil Co. (PNOC) for the development of a liquefied natural gas (LNG) terminal.
“First Gen acceded to be a minority partner. That I can tell you, but not the details. They have been attending our negotiations. They recognize they need us more,” PNOC President Reuben Lista said.
PNOC plans to put up an LNG terminal consisting of an initial 200-megawatt (MW) modular power plant, storage and regasification facilities. “Our target is 2019, but the most practical will be in the middle of 2020 and 2021,” Lista said, when asked how soon PNOC can finish the project.
Lista added the possible entry of First Gen, which owns and operates a number of gas plants in Batangas, is “a win-win solution”. First Gen earlier said it was keen on building a $1-billion LNG terminal.
“Win-win solution because there will be continuity in the power generation. Kaysa sila ang gagawa, eh bibili ka pa din naman ng gas,” Lista said. Shell Philippines also expressed interest to build its own LNG terminal. However, there was no offer  received by PNOC.
Ang Shell, they came to us, but only for a visit. There was no offer. I heard they are planning to put up an FSRU [Floating Storage and Regasifying Unit]. I do not think they will push it, they probably thought we are not serious. Look at First Gen. They invited us to visit their area. The whole team went there in Batangas. They showed us their plans and I said, if they are really keen on putting it up, then I won’t put up my own anymore. Then they said let us partner,” Lista said. The list of interested foreign firms in investing on the country’s LNG sector has grown to 34 from 27 last month.
“By the end of the month, we will really see who are interested among them,” he said.
PNOC has earlier set end-April as deadline to accept offers for those wanting to take part in jump-starting the country’s LNG sector.
The foreign firms are from China, Spain, Singapore, South Korea, Japan, Turkey, Australia and United Arab Emirates.
“We are not competing with the private sector. This LNG project will actually help the private sector. We will assure there is a source of LNG if and when the Malampaya gas field fizzles out,” Lista said.

Meralco raising P100-B loan for Atimonan coal-fed power project

Published April 26, 2017, 10:01 PM By Myrna M. Velasco

Power utility giant Manila Electric Company (Meralco) is firming up discussions with at least eight (8) banks for up to P100 billion worth of loans it will be raising for its two-phased Atimonan coal-fired power project of 1,200-megawatt capacity.
According to Meralco Chairman Manuel V. Pangilinan, the project’s total financing requirements would hover at P135 billion – and bulk of that at 75 percent will comprise the debt portion.
 “The debt component of that is P100 billion and the balance of P35 billion will be equity,” he reiterated.
The Atimonan power project is being advanced into implementation by the utility firm’s power generation subsidiary Meralco PowerGen via corporate vehicle Atimonan One Energy (A1E), Inc.
Alongside the targeted financial closing this 2017, Pangilinan indicated that partner selection is similarly ongoing from among the four interested parties in their shortlist.
“Meralco is taking the process and they have financial advisor for that… there’s a final list of four companies – combination of foreign and local companies,” he said.
Pangilinan added they can offer up to 49 percent equity to the prospective partner, and Meralco at the project company level could still maintain its usual tie-up approach of having a majority stake in such segment of its business.
“Up to 49 percent is under negotiation. Meralco at least will be picking one, depending on the final thinking on how much we should own,” he stressed.
Beyond financial closing and cornering a project partner, the company is also earnestly awaiting the approval of its power supply agreement (PSA) on the project’s capacity off-take (generated electricity purchase deal), which is still pending with the Energy Regulatory Commission.
Pangilinan qualified that achieving milestones for these specific steps in the project’s implementation would not be intra-conditional.
Nevertheless, he noted it is still “good for the banks to know that – if indeed we close the financing in the next few months, then the equity part should also be developed.”
Another major project development step being pushed is the award of the facility’s engineering, procurement and construction (EPC) contract that is similarly targeted within the year. The utility firm has at least three in its shortlist for this particular sub-component of the project.
The Atimonan power facility is due for completion and commercial commissioning in 2021 – strategically targeted for the country’s need for capacity additions within that timeframe.

2 foreign firms eyeing PLDT stake in Meralco


THE head of the Philippine Long Distance Telephone Co. (PLDT) said Tuesday two foreign companies were interested in buying its remaining stake in power distribution utility Manila Electric Co. (Meralco).
“There are two serious foreign companies,” PLDT Chairman and Chief Executive Officer Manuel V. Pangilinan told reporters.
The stake is equivalent to about eight eight percent of Meralco, through shareholder Beacon Electric Asset Holdings Inc. PLDT.
PLDT owns 25 percent of Beacon, a joint venture between unit PLDT Communications and Energy Ventures and affiliate Metro Pacific Investments Corp.
“The sale of Meralco shares is really being undertaken by PLDT. Selling its 25 percent stake in Beacon…Beacon in turn owns approximately 35 percent of Meralco, so we are talking about a little over 8 percent of attributable interest in Meralco,” Pangilinan explained.
Pangilinan said no other company in the PLDT-Metro Pacific group, which is controlled by Hong Kong’s First Pacific Co. Ltd. of the Salim group of Indonesia, would like to buy the PLDT stake in Meralco.
Aside from Beacon, the other major stockholder in Meralco is JG Summit Holdings Inc. of the Gokongwei family.
The sale of PLDT’s stake in Meralco will be used to cut debts and support massive capital spending amid a shifting telecommunications landscape, Pangilinan said.
“Well, essentially to reduce debt at the PLDT level because the proceeds will have to go to PLDT and there might be a portion that will be devoted to payment of the balance installments due to San Miguel Corp. in respect of the telco acquisition,” Pangilinan said.
Last year, PLDT and Globe Telecom acquired in a joint deal San Miguel’s prized 700-megahertz 4G Long-Term Evolution frequency for P69.1 billion.