Ayala firming up 50% stake acquisition in Tan-initiated LNG project

Published November 23, 2021, 3:46 PM

by Myrna M. Velasco

Ayala-led ACE Enexor Inc. is finalizing plans on its acquisition of 50 percent stake in the Batangas Clean Energy Inc. (BCE), the corporate vehicle of the integrated liquefied natural gas (LNG) import terminal and power project initiated by the Lucio Tan group and approved by the Department of Energy.

In a disclosure to the Philippine Stock Exchange (PSE), the Ayala company indicated that it will subscribe to shares in BCE, cementing a joint venture deal with Gen X Energy L.P., an American company affiliated with equity investment firm The Blackstone Group.

“The transaction will enable the company to develop and eventually, if the agreed conditions precedent to pursue the project are met, to co-own and operate through BCE, a 1,100-megawatt combined cycle power plant that will be able to use natural gas and/or green hydrogen as its fuel,” ACE Enexor stated.

The Ayala firm added that “BCE shall file an application for the increase of its authorized capital stock with the Securities and Exchange Commission.”

ACE Enexor further indicated that it will subscribe to a total of 150,002 shares in BCE for a total subscription price of P150,219,040.

In project-application filing with the DoE, the original proponent of the US$735 million BCE gas project is Lucio Tan Energy and Resources Inc. and that has been in partnership with US firm Gen X Energy.

The proposed venture will comprise of integrated onshore LNG import facility to be sited at Pinamucan Ibaba in Batangas City; and proximate to it will be a 1,100MW gas-fed power plant installation. The notice-to-proceed (NTP) on the LNG import terminal venture, in particular, was granted by the energy department around April last year.

Of the targeted project developments, the Ayala firm emphasized that its tie-up with Gen X Energy will be in the power plant component. Arrangements on management and operations will be finalized upon the execution of the shareholders’ agreement on closing.

ACE Enexor reiterated that “the joint venture will be through BCE, the special purpose vehicle company, where the company and Gen X Energy, will own 50-percent interest – subject to satisfaction of agreed conditions precedent and execution of further definitive documents.”

In the project blueprint submitted to the DOE, it was noted that the electricity generated from the proposed gas plant will cater to key industries near the project site, including the Tan group’s distilleries as well as a petrochemical complex in Batangas.

For the LNG import terminal, the planned capacity had been placed at 3.0 million tons per annum (mtpa); and its anchor load will be the 1,100MW power project.

The LNG venture of BCE is being lined up for completion in 2025, and it will be among the energy infrastructure developments that will replace the depleting Malampaya field, and of which operations may also cease at the lapse of its service contract in 2024.