Metro Pacific Investments Corporation (MPIC) is investing an initial US$67 million through a partnership with Keppel Infrastructure Trust (KIT) to acquire Philippine Coastal Storage & Pipeline Corporation (PCSPC), the largest petroleum products import terminal in the Philippines.
In a disclosure to the Philippine Stock Exchange, MPIC said the partners have entered into a Sale and Purchase Agreement with Philippine Investment Alliance for Infrastructure (PINAI), the 10-year closed-end fund managed by Macquarie Infrastructure and Real Assets (MIRA).
MPIC will initially hold a 20 percent stake in Philippine Tank Storage International Holdings, Inc. (PTSI), the parent of PCSPC. In addition, MPIC and KIT are discussing giving MPIC an option to increase its interest in PCSPC up to 50 percent.
Through this investment, MPIC will be able to diversify its portfolio and revenue streams in a new industry vertical with strong growth potential. PCSPC generates stable cash flows via take-or-pay contracts with high quality off-takers.
“With PCSPC accounting for 36 percent of the total import terminal storage requirements of the Philippines, MPIC sees this facility as vital energy infrastructure for the country,” said MPIC Chairman Manuel V. Pangilinan.
He added that, “MPIC and its strategic partner KIT look forward to further expanding the capacity of PCSPC to provide millions of Filipinos with added energy security.”
Matthew Pollard, Chief Executive of Keppel Infrastructure Fund Management Pte Ltd, the Trustee- Manager of KIT, said, “The strategic acquisition of PCSPC will allow KIT to diversify, grow and strengthen the resilience of KIT’s distributable cash flow.”
“As the largest petroleum products import storage facility in the Philippines, where demand for petroleum products is expected to grow, PCSPC presents an attractive opportunity for KIT to capture opportunities arising from the strong macroeconomic outlook as well as robust growth fundamentals for imported petroleum products in the Philippines,” said Pollard
PCSPC is the largest independent storage facility in the Philippines with a storage capacity of approximately 6.0 million barrels, when it completes an expansion in early 2021. The 150- hectare facility comprises of 86 storage tanks, 2 piers and a pipeline infrastructure connecting the entire facility.
Strategically located in the Subic Bay Freeport Zone, PCSPC provides clients with a well-connected distribution hub to the largest economic catchment area – Metro Manila and North and Central Luzon.