The First Pacific Group Pangilinan plans to establish an integrated natural gas business by utilizing gas from Service Contract 72, or the Recto Bank, and transporting it through a pipeline of Philippine Coastal Storage & Pipeline Corp. to fire the power plants of Manila Electric Co.
“We hope SC 72 could get developed as an oil field and once it starts developing, we have to connect to Malampaya because we need the facilities to process the raw gas, then pipe it to Batangas and Meralco should get into gas plants whether it’s in Batangas, in Atimonan or in Subic,” Manuel Pangilinan, chairman of Manila Electric Co. and Metro Pacific Investment Corp., told reporters.
PXP Energy Corp. through Forum Energy Plc owns SC 72. PXP Energy is a unit of Philex Mining Corp., both of which are headed by Pangilinan.
MPIC announced in December its acquisition of 100 percent of Philippine Tank Storage International Holdings Inc., which owns PCSPC, the country’s largest petroleum import storage facility in Subic Bay with a capacity of 6 million barrels for $334 million.
MPIC will initially acquire a 20-percent stake in the company that will have full ownership in PCSPC for $67 million, with an option to increase it to 50 percent.
Pangilinan said PCSPC needed to expand its network throughout the country and the key economic areas such as Davao, Northern Mindanao, Cebu and parts of Luzon.
He said his group was looking at cheaper ways to convey the natural gas through a pipe network from Subic to Clark or build a new pipeline to Metro Manila.
Pangilinan said they were studying the PCSPC expansion plans including the possible tie-up with SC 72 because “it is something that the country needs moving forward considering they have to import most if not all of our finished petroleum products.”
Pangilinan said the 1,200-MW Atimonan coal plant is a candidate to become a gas plant but is still waiting for another Meralco competitive selection process this year.
“We’re looking at other sites, whether we should locate in Batangas where all of the gas plants are located or should we build a new gas complex in Atimonan itself,” he said.
Pangilinan said other sites being considered are Zambales and Bataan on the west coast of Luzon.
He said this should be studied quickly, because Meralco would hold another CSP towards the end of the year.
Pangilinan said his group also offered to acquire the 45-percent stake of Shell Philippines Exploration B.V. in the $4.5-billion Malampaya gas-to-power project in northwest Palawan.
PXP Energy and Forum can utilize the Malampaya platform to deliver gas from their service contracts to the end-users, if successfully proven to contain natural gas of commercial quantity.
Pangilinan said one or two other banks joined the “group effort that made an offer” for Spex’s shares.