Lopez-led First Gen Corp. is betting that its ₱50 billion partnership with billionaire Enrique Razon Jr. will provide the scale necessary to insulate local grid from volatile energy markets, defending the sale of its majority stake in the natural gas portfolio as a move to prioritize cheaper domestic fuel.

Speaking at the Philippine Chamber of Commerce and Industry (PCCI) Energy Summit 2026 on Tuesday, May 12, Francis Giles Puno, First Gen president, described the divestment as a “difficult but correct” pivot.

Under the deal, Razon-led Prime Infrastructure Capital Inc. acquired a 60 percent majority stake in a portfolio totaling over 3,000 megawatts, including the Sta. Rita, San Lorenzo, San Gabriel, and Avion power plants, alongside an interim offshore liquefied natural gas (LNG) terminal in Batangas.

The shift comes as the Philippines grapples with the depletion of the Malampaya gas field, the country’s only indigenous source of natural gas. For decades, Malampaya has provided a price-stable alternative to imported coal and oil, but its waning output has forced power producers to pivot toward expensive LNG imports.

By aligning with Prime Infra—which also holds a controlling stake in the Malampaya consortium—First Gen is effectively integrating its generation fleet with the fuel source, ensuring its plants get priority access to the remaining domestic supply.

Puno noted that this integration allows the joint venture to blend indigenous fuel with LNG only when necessary. In the current market, operating exclusively on imported LNG is the most expensive generation option, often exposing consumers to price spikes driven by global geopolitical tensions.

“In the context of gas development, nothing can come close to our joint venture in Batangas,” Puno said. “It is not just because of the power plants themselves, but because of how we fuel these plants.”

The transaction marked the end of an era for First Gen, which pioneered the gas-to-power industry in the country nearly 30 years ago. As legacy 25-year contracts expire, the company faces a volatile “merchant” market where plants must sell power at fluctuating spot prices or bid for new contracts against aggressive competitors.

The focus now shifts to the 1,000-MW Sta. Rita facility, which is nearing the end of its supply agreement with Manila Electric Co. (Meralco).

Prime CoreGen, the subsidiary formed to manage the assets, is now seeking a contract extension. Jocot de Dios, Prime CoreGen president and chief executive officer, explained that keeping the facility online is vital for grid reliability, particularly as the Department of Energy pushes for a transition away from coal.

While the group has yet to file a formal application with the Energy Regulatory Commission, it is evaluating its expanded portfolio to determine which assets will participate in upcoming competitive auctions.

“We have to take a look at the portfolio and understand which is the best asset we deploy,” de Dios said.