First Gen-Prime Infra team-up sets rivalry of LNG giants
The partnership of First Gen Corp. and Prime Infrastructure Capital Inc., now formalized, is seen stoking a big matchup in the domestic liquefied natural gas (LNG) market.
The team up is “a major competitor to the LNG partnership of Aboitiz, Meralco and San Miguel,” according to Juan Paolo Colet, managing director at investment bank China Bank Capital Corp.
On Wednesday, First Gen said the Lopezes have officially signed an agreement with billionaire Enrique Razon Jr. to sell 60 percent of First Gen Corp.’s gas business to the tycoon’s Prime Infra for P50 billion.
This brings the two parties closer to sealing another collaboration that could rival another multibillion-peso partnership.
First Gen disclosed to the stock exchange that the deal with Prime Infra was still subject to the approval of the Philippine Competition Commission.
Although there is no specific date yet as to the financial closing for the acquisition, First Gen said both companies were hoping to have the deal “concluded soon.”
This marks another significant collaboration among some of the most influential business leaders in the country, particularly in the power sector.
In 2024, Manuel Pangilinan-led Meralco PowerGen Corp., Aboitiz-led Therma NatGas Power Inc. and Ramon Ang-led San Miguel Global Power Holdings Corp. signed a $3.3-billion deal to launch the “first and most expansive” LNG facility in the Philippines.
According to Colet, the deal also allows First Gen to take advantage of and unlock the value of its gas-related assets “and refocus on being a pure-play renewable energy platform.”
“The windfall gives the company a lot of financial firepower to make significant renewable energy investments,” he added.
Once it is approved, Razon-led Prime Infra will hold a 60-percent ownership in the 1,000-megawatt (MW) Santa Rita, 500-MW San Lorenzo, 450-MW San Gabriel and 97-MW Avion power plants.
These gas-fired facilities provide a fifth of the country’s power needs.
Apart from these, Prime Infra will likewise get control of the proposed 1,200-MW Santa Maria power plant and First Gen”s interim offshore LNG terminal.
