In an apparent effort to consolidate its assets in the natural gas industry, Enrique Razon-led Prime Infrastructure Capital Inc., a diversified conglomerate, has struck a deal to acquire 60 percent of the Lopez group’s First Gen Corp. for at least P50 billion, documents filed with the Securities and Exchange Commission (SEC) show.
The deal marks a significant development in the energy sector with a strategic partnership between two of the country’s most prominent business groups.
The move strengthens Prime Infra’s foothold in the natural gas market, which is increasingly vital for energy security and the transition to cleaner energy sources.
The transaction involves Prime Infrastructure Capital Inc., through unit Prime Energy, acquiring a 60 percent equity stake in First Gen’s gas business units that include four existing gas-fired power plants in Batangas: the 1,000-megawatt (MW) Santa Rita, 500-MW San Lorenzo, 450-MW San Gabriel, and 97-MW Avion plants. Additionally, the deal covers a planned 1,200-MW Santa Maria gas-fed plant and First Gen’s interim offshore liquefied natural gas terminal.
The acquisition positions Prime Infra as a dominant player in the natural gas market. First Gen emphasized that the partnership will foster a competitive market for power generation by providing a “least-cost solution” for consumers through efficient gas aggregation.
Malampaya at center stage
Prime Infra already holds a significant position in the natural gas industry as operator of the Malampaya gas field, the country’s primary indigenous gas resource, through its subsidiary Prime Energy Resources Development B.V.
First Gen, meanwhile, controlled by the Lopez family, is a leading power generation company in the Philippines with a portfolio spanning natural gas, geothermal, hydro, wind, and solar energy.
Its gas-fired power plants, which rely heavily on Malampaya natural gas as fuel, account for a significant portion of Luzon’s electricity supply of approximately 20 percent.
The two groups previously collaborated in a 15-year lease agreement signed in December 2023 for First Gen’s LNG terminal in Batangas, which supports Prime Infra’s gas aggregation strategy.
The strategy focuses on blending Malampaya gas volumes with imported LNG to ensure a stable and cost-effective supply for power plants.
Prime Infra’s unit Prime Energy, became the full operator of the Malampaya gas field in November 2023 after acquiring a 45 percent stake from Shell Philippines Exploration B.V. (SPEX). The Malampaya field, operational since 2001, supplies gas to First Gen’s power plants in Batangas.
By acquiring a majority stake in First Gen’s gas business, Prime Infra is consolidating its control over the natural gas value chain in the Philippines. This move aligns with Prime Infra’s gas aggregation strategy, which aims to ensure a reliable, low-cost supply of natural gas for power generation.
The partnership is positioned as a step toward enhancing the Philippines’ energy security. The Malampaya field, a critical indigenous resource, is depleting, and new drilling planned for 2025 aims to explore additional reserves.
Meanwhile, the LNG terminal enables the import of gas to sustain power plant operations. This deal ensures that both companies can work closely with the government to secure long-term energy independence.
Prime Infra is investing heavily in the energy sector, with over $600 million allocated for Malampaya’s new drilling activities and seismic surveys in 2025. The acquisition of First Gen’s assets further commits Prime Infra to expanding its gas infrastructure, including the planned 1,200-MW Santa Maria plant.
For the Lopez group, the sale provides a significant cash infusion, which could be redirected to its renewable energy portfolio or other strategic priorities.