Regulators have given the green light to an alliance between a trio of Philippine energy giants, granting them control over the integrated liquefied natural gas (LNG) project in Batangas province.

The Philippine Competition Commission (PCC) announced on Monday. Dec. 23, it approved a joint partnership between Meralco PowerGen Corp. (MGEN), Therma Natgas Power Inc. (Therma), and San Miguel Global Power Holdings Corp. (San Miguel Power).

The PCC approval granted three of the country’s largest power firms control over Batangas's $3.3 billion LNG project.

Under the agreement, Chromite Gas Holdings, Inc., a joint venture of MGen and Therma, will acquire a 67 percent equity interest in South Premiere Power Corp. (SPPC), Excellent Energy Resources, Inc. (EERI), and Ilijan Primeline Industrial Estate Corp.

Chromite and San Miguel Power (SMP) will also fully acquire LNG terminal operator Linseed Field Corp.

“As a result of these acquisitions, MGEN and Therma, through their 60/40 ownership of Chromite, will control 67 percent of SPPC, EERI, and Ilijan Primeline, while San Miguel Power retains a 33 percent stake in these three entities and gains a corresponding interest in LFC,” PCC stated.

To address potential competition concerns arising from this alliance, such as coordination risks in the power generation market and the possibility of exclusionary supply deals, the PCC has imposed several conditions for a period of five years.

These conditions include oversight of the Competitive Selection Process (CSP) to ensure transparent bidding for power supply agreements (PSAs) and prevent collusion.

Additionally, the acquired companies must operate independently of their parent companies, maintaining separate management and facilities.

Furthermore, the boards of directors will include independent members, and internal trading units will operate independently of affiliates.

To ensure transparency and accountability, power plants must submit reports on unplanned outages to the PCC, and Competitive Retail Electricity Market (CREM) reports will also be required.

Finally, parent companies are mandated to appoint a competition compliance officer.

Violations of these conditions could result in fines of P2 million per infraction, along with other penalties.

The PCC said these safeguards balance encouraging investment in energy infrastructure with ensuring a fair and competitive market.

In a joint statement, San Miguel, AboitizPower and MGen stated that this transaction would enhance the country's energy security and infrastructure while advancing a competitive energy market.

“This partnership highlights the shared vision of MGEN, AboitizPower, and SMGP to address the growing energy needs of the Philippines while promoting transparency, fairness, and long-term sustainability in the energy sector,” the consortium said.