Vitol seals 10-year SPA to supply LNG to Philippines

LNGPH, which includes South Premiere Power Corporation (SPPC), Excellent Energy Resources (EERI), and Linseed Field Power Corporation (LFC), signed the SPA with Vitol Asia, a unit of Vitol.

Starting in 2025, Vitol will supply up to 0.8 million metric tons of LNG annually for a period of 10 years, Vitol said on Tuesday.

Vitol said the LNG supplies will be sourced from its global portfolio and delivered to the LNGPH terminal in Batangas, Philippines.

“This agreement will help meet the Philippines’ growing energy needs and contribute to the reliability and stability of the country’s energy supply,” the trader said.

Vitol said LNGPH is part of a “landmark” LNG partnership between Meralco PowerGen Corporation (MGEN), AboitizPower (AP), and San Miguel Global Power (SMGP).

This strategic collaboration is set to support at least 18 percent of Luzon’s power needs, strengthening the country’s energy security.

Currently, SPPC has a net sellable capacity of 1,200 MW from its combined-cycle gas-fired facility, while EERI has a net sellable capacity of 1,275 MW.

Growing LNG market

Vitol delivered its first LNG cargo to the Philippines back in April 2023 to commission AG&P’s LNG import terminal in Batangas Bay.

This cargo was used to cool down the floating storage unit, Ish, and commission the country’s first LNG terminal near Manila.

Since then, Vitol has delivered a “number of LNG cargoes” to the Ilijan LNG terminal, the trader said.

“We are pleased to build on the existing relationship between Vitol and SPPC/EERI and to conclude this long-term LNG supply deal together,” Pablo Galante Escobar, Vitol’s head of LNG and executive committee member said.

“The Philippines is a growing LNG market and we are excited to bring LNG supply from our global LNG portfolio to meet this rising LNG demand in the country, thereby contributing to the transition to gas from other more carbon intense energy sources,” he said.

$3.3 billion LNG-to-power deal

In January this year, Power companies MGEN, AP, and SMGP completed the financial close of their previously announced LNG-to-power partnership worth about $3.3 billion.

The transaction involved the acquisition by MGen and TNGP, through Chromite Gas (CGHI), of a 67 percent equity interest in SPPC, EERI, and Ilijan Primeline Industrial Estate (IPIEC).

Furthermore, CGHI and SMGP jointly acquired 100 percent of LFC, a unit of Singapore’s LNG firm AG&P and operator of the LNG terminal in Batangas City.

As a result of these acquisitions, MGen and TNGP, through their 60-40 stakes in CGHI, respectively, own 67 percent of SPPC, EERI, and IPIEC, while SMGP retains a 33 percent stake in these entities and gains a corresponding interest in LFC.

MGen and AP will jointly invest in two of SMGP’s gas-fired power plants—the 1,278 MW Ilijan power plant and a new 1,320 MW combined cycle power facility.