Prime Exploration Pte. Ltd., a subsidiary of Prime Infrastructure Capital Inc., formally acquired the 45-percent stake owned by a unit of Udenna Corp. in the Malampaya gas project off northwest Palawan.
Prime Exploration signed a share purchase agreement to purchase MEXP Holding Pte. Ltd., a subsidiary of Udenna.
“Prime Infra’s acquisition of MEXP reflects our shared commitment with the national government to help maintain energy security and independence as we transition to a renewable energy-fueled Philippine economy,” said Prime Infra chairman Enrique Razon Jr.
“We believe that gas is an important transition fuel in the near-term, reducing the need for baseload fossil fuels like coal. Hence, we intend to accelerate investments on the Malampaya gas field to improve the output of existing wells and, if possible, develop new wells in the area once the license extension is secured from the government,” said Razon.
Prime Infra, Shell Philippines Exploration B. V. and Udenna are working together to transition SPEX into Prime Infra smoothly, the parties said in a joint statement.
“We look forward to this opportunity to partner with Prime Infrastructure and PNOC EC as we explore more ways to fulfill our common vision to make Malampaya continue to operate safely and reliably to strongly support our country’s need for indigenous and sustainable energy for many years to come,” said Udenna chairman and chief executive Dennis Uy.
MEXP earlier signed an agreement with Shell Petroleum N. V. to acquire Shell Philippines Exploration B. V. SPEX owns a 45-percent participating interest in Malampaya project and is the operator of the project’s consortium.
“Shell remains committed to complete our shares sale of SPEX which holds 45-percent operating interest in Service Contract 38. The sales and purchase agreement we have executed with Malampaya Energy XP remains in place,” SPEX said.
MEXP said while there was a change of ownership from Udenna to Prime Infra, the terms and conditions under which Shell sold SPEX to MEXP had not changed.
The other members of the SC 38 consortium are UC38 LLC, another subsidiary of Udenna, and state-run PNOC Exploration Corp., which respectively own a 45-percent and 10-percent participating interest in the project.
The change in control of SPEX from Shell to Prime Infra is subject to the consent of PNOC EC and the Department of Energy. Once the consents are given and the transition process for a safe and seamless handover of operations is completed, Prime Infra will assume full ownership and control of SPEX.
“Shell is working closely with both MEXP and Prime Infra to ensure the change of ownership will not unduly disrupt the transition process and continue to work with PNOC EC and DOE to complete the deal by fourth quarter 2022,” SPEX said.
The Malampaya project is one of the country’s most important power assets. It produces natural gas for power plants in Batangas City, accounting for around 20 percent of the Philippines’ total electricity requirements. It began operations in 2001, with the consortium’s license for the project set to expire in 2024.
Prime Infra’s investment in expanding Malampaya operations is seen critical to providing the necessary infrastructure to support the development of natural gas in the area, one of the critical points defined in the administration’s energy plan.
The Malampaya asset is a significant addition to Prime Infra’s growing energy portfolio as it reduces the country’s reliance on imported fuel and helps drive economic productivity and industrial growth.