Japan’s LNG trading giant Jera has decided to buy a 27 percent stake in Aboitiz Power, as it also revealed plans to develop LNG-to-power projects in the Philippines.
Jera said on Monday it has executed a share purchase agreement with Aboitiz Equity Ventures and Aboitiz & Company worth about $1.58 billion.
Aboitiz Equity Ventures is the public holding company of the Aboitiz Group with major investments in power, banking and financial services, food, infrastructure, and land.
Completion of the transaction, subject to necessary approvals, would further enhance Jera’s presence in the Philippines’ energy sector. Working in conjunction with Aboitiz Power, Jera hopes to “significantly advance the expansion of clean and renewable energy in the country,” it said.
Aboitiz Power, listed on the Philippines Stock Exchange, is the holding company for the Aboitiz Group’s investments in power generation, distribution, and retail electricity services.
The company is one of the largest power producers in the Philippines with a balanced portfolio of assets located across the country and owns distribution utilities that operate in high-growth areas in Luzon, Visayas, and Mindanao, including the second and third largest private utilities in the country, Jera said.
9.2 GW capacity
Aboitiz Power aims to expand power generation capacity to 9.2 GW and achieve a 50:50 clean energy and thermal capacity mix by 2030 to meet the increasing demand for electricity in the future while promoting renewable energy in the Philippines,
At the same time, Jera is working to eliminate CO2 emissions from its domestic and overseas businesses by 2050 under its 2050 objective.
LNG-to-power
Jera and Aboitiz Power are exploring a number of areas of collaboration including the potential joint development of power projects such as LNG-to-power, collaboration on new generation technologies, and potential participation in aspects of plant O&M, the Japanese firm said.
The joint venture of Tepco and Chubu Electric has also signed a memorandum of understanding with Aboitiz Power to collaborate in fuel sourcing and management of the LNG required for potential power plants which can supplement intermittent renewable energy, it said.
In addition, the duo are collaborating on a roadmap to reduced CO2 emissions in the Philippines, and will work together to explore potential opportunities to develop “zero-emission thermal power generation” technologies that Jera is developing in Japan.
Such technologies avoid CO2 emissions during power generation by using “green fuels such as ammonia and hydrogen,” Jera said.
The Philippines has several LNG import facilities on the table as the Malampaya gas field becomes less reliable in producing and providing sufficient fuel supply for the country’s existing gas-fired power plants.
These include the project led by Singapore’s downstream LNG player AG&P but also First Gen’s Batangas development.