Philippine tycoon Enrique Razon plans to acquire a controlling stake in the country’s crucial Malampaya gas-to-power project on the island of Palawan, his company said in a statement on Thursday.
Razon’s Prime Infra Holdings will buy the majority stake from a company controlled by Dennis Uy, a close associate of outgoing Philippines President Rodrigo Duterte.
It was not immediately clear why Uy, the top campaign contributor of Duterte in his 2016 presidential run, was putting the assets up for sale.
Prime Infra did not disclose the deal’s value or how many shares Razon is buying. Uy, whose business empire expanded rapidly since 2016, acquired a combined 90% share in the Malampaya gas field from Chevron and Shell for roughly $1 billion.
Uy said he looked forward to partnering with Razon and state-owned Philippine National Oil Company-Exploration Corporation (PNOC-EC) to sustain Malampaya’s operations and meet an “urgent need for energy security”.
The acquisition requires the consent of various parties, including the energy ministry and PNOC-EC, which owns 10% of Malampaya.
The Malampaya offshore gas field is located in Palawan province, in an area of the South China Sea not claimed by Beijing and fuels power plants that deliver about a fifth of the Philippines’ electricity requirements.
The project extracts natural gas and condensate from the depths of the Palawan basin. It then processes the gas in a nearby shallow water production platform and transports it across three provinces through a 504-km underwater pipeline.
In December, Uy’s Udenna said Malampaya may operate for several more years beyond its projected 2027 project life.
- Reuters, with additional editing by George Russell