Prime Infra Holdings—the privately held infrastructure investment firm owned by billionaire Enrique Razon Jr.—is poised to acquire a controlling interest in the Malampaya gas project from Davao-based businessman Dennis Uy’s Udenna Corp.
The proposed transaction—which comes a year after Udenna bought Shell Petroleum NV’s 45% stake in the Malampaya project for at least $380 million, doubling its stake in the gas project—is subject to approvals from regulators, creditors, the Department of Energy, and the state-owned Philippine National Oil Company Exploration Corp., Prime Infra said Thursday. Financial details weren’t disclosed.
The deal also comes less than a month after Razon’s Bloomberry Resorts, operator of the Solaire Resort and Casino in Manila, agreed to invest in Uy’s casino resort projects in the central Philippine island of Cebu and at the former Clark Airbase in Pampanga, north of Manila. The proposed sale of his stakes in the casino and Malampaya projects are the latest assets Uy is divesting after selling his company’s shares in logistics firm 2GO Group Inc. to the Sy family’s SM Investments Corp. in June last year.
Prime Infra is investing in the Malampaya project at a critical time as the service contract for the offshore natural gas field, located some 80 kilometers northwest of Palawan island in the West Philippine Sea, is set to expire in 2024. Upon completion of the deal, the company intends to seek government approval to extend the service contract and expand the production areas.
“Natural gas is a critical transition fuel and the modern, state-of-the-art infrastructure built to harness this valuable transition fuel attracted us to pursue this deal,” Razon, chairman of Prime Infra, said in a statement. “All aspects of the project ticks off our environmental, social, and governance (ESG) checklist that will allow us to contribute more to the country’s transition from expensive and volatile coal and imported fuel prices to affordable cleaner and domestic energy resources like natural gas.”
Developed by British energy giant Shell in the 1990s, Malampaya has been the sole source of fuel for gas-fired power plants in Luzon, the Philippines’ biggest island, since it came online in 2002.
“We will invest and sustain the development and production of domestic gas as long as the terms of the operating license and the natural resources permit,” Razon said.
Razon—who also has the controlling stake in global port giant International Container Terminal Services Inc.—has been stepping up investments in utilities in recent years. In June 2021, Trident Water, a subsidiary of his infrastructure-focused Prime Strategic Holdings, took control of water utility Manila Water from Ayala Corp. Razon has a net worth of $6.4 billion, according to Forbes’ real-time data.