SMC revives interest in Malampaya gas project

San Miguel Corp. has revived its interest in the Malampaya natural gas project, one of the biggest sources of electric power in Luzon.

Quoting SMC president Ramon S. Ang, The Manila Standard reported that the diversified conglomerate was interested in acquiring the 45 percent stake of Shell Philippines Exploration B.V. in Service Contract 38, which is set to expire in 2024.

Shell on Wednesday said it was exploring the possibility divesting its interest in Malampaya as part of an ongoing rationalization program aimed at ensuring the long-term sustainability of its operations. The planned sale follows the company’s decision to shut down its refinery to save cash and focus more on renewable energy.

SMC has taken an interest in the Malampaya deep water gas-to-power project since 2015. During this time, Ang viewed the acquisition of the project as the “deal of the century.”

The gas extracted from the Malampaya facility supplies a fifth of the country’s electricity requirements.

Other Malampaya stakeholders, PNOC Exploration Corp. and businessman Dennis Uy’s Udenna Corp., howver, hold a right of first refusal to purchase the shares held by Shell.

PNOC, which holds a 10% stake, is also reportedly studying the possibility of bidding for Shell’s shares in the Malampaya project, which could be the new battleground for the country’s energy giants.

Udenna acquired 45% interest in the project by buying out the stake of Shell’s former partner, Chevron.

In 2019, Pangilinan-led Philex Petroleum Corp. submitted an unsolicited proposal to take over the Malampaya project by acquiring Chevron’s stake. The Department of Energy, however, rejected Philex’s proposal.

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