Uy-led firm Phoenix Petroleum Philippines Inc. has denied interest to buy the ‘banked gas’ of state-run Philippine National Oil Company (PNOC) that shall be extracted from the Malampaya field.
It was no less than PNOC President and CEO Reuben S. Lista who indicated that Phoenix Petroleum is among the firms that has standing offer for the banked gas, but the oil firm said that “statement is unconfirmed.”
In a disclosure to the Philippine Stock Exchange (PSE), Phoenix Petroleum further emphasized that “the company has no knowledge of any interest to purchase banked gas as of date of writing.”
But the oil firm qualified “should there be any manifest interest and the board approves the same, we shall make the necessary disclosures at the appropriate time.”
Lista has been informed of the denial on his claimed Phoenix offer for the banked gas, and he said that the group of businessman Dennis Uy just formally communicated to them that they are no longer interested.
“We respect that if it is for their best interest. No worries for us as there are other interested parties in the banked gas,” the PNOC chief executive said.
On the other hand, Lopez-led First Gen Corporation confirmed that it remains very keen on buying the ‘banked gas’; and will be willing to sit down with government again on prospective negotiations for that transaction.
According to Jerome Cainglet, vice president of First Gen, “we have expressed our interest to purchase the banked gas for use of our gas-fired plants.”
He pointed out that since the 2016 bidding set by the Philippine National Oil Company (PNOC), which is the government entity now owning the banked gas, First Gen continued “to be interested if PNOC will sell the banked gas.”
The banked gas is being sold by government-run firm PNOC so it can monetize the estimated value of that asset – previously appraised at US$600 million to US$750 million.
The gas was purchased by PNOC from another state run firm, the National Power Corporation, which was the government entity that had underwritten the gas sale and purchase agreement (GSPA) for the 1,200-megawatt Ilijan gas-fired power facility.
That fuel, which accumulated within 2002-2004 timeframe, had been originally intended for the Ilijan plant, but because of dispatch constraint in the initial year of the facility’s operations, there had been unused fuel that was eventually labeled as the ‘banked gas’.
The gas contract for the Ilijan plant will expire next year; while the Service Contract (SC) 38 for the Malampaya field will lapse in 2024, hence, the sale of the ‘banked gas’ is one of the business puzzle that has to be addressed by the government.
The majority shareholders in the Malampaya project had already unloaded their interests; first was Chevron; and if the sale of Shell’s shareholdings will be consummated this year, then the Malampaya Energy XP Pte Ltd, a subsidiary of Udenna Corporation of businessman Dennis Uy, will become the next operator of the gas field.