November 13, 2019 / 11:05 AM / a month ago

Philippines' Udenna says it is buying Chevron's stake in Malampaya gas project

MANILA (Reuters) - Philippine oil and shipping group Udenna Corp said on Wednesday it has signed a deal to acquire the 45% interest of a Chevron unit in the country’s Malampaya gas-to-power project, subject to regulatory approvals.

Udenna, which controls fuel retailer Phoenix Petroleum Philippines Inc and shipping and logistics firm Chelsea Logistics and Infrastructure Holdings Corp, said it has signed a sale and purchase agreement with Chevron Malampaya LLC.

Phoenix, together with Chinese partner CNOOC Gas and Power and state-owned Philippine National Oil Company (PNOC), is looking to build a $2 billion liquefied natural gas hub in the Philippines.

The Malampaya project, developed and operated by Shell Philippines Exploration BV which also has a 45% interest in it, provides the fuel for power plants with a combined capacity of more than 3,000 megawatts.

The remaining 10% is held by PNOC’s unit, PNOC Exploration Corp.

“The acquisition of Chevron’s interest in the Malampaya gas field marks an important milestone for Udenna, fitting strategically with our long-term ambitions of developing a sustainable clean energy business in the Philippines,” Udenna CEO and Chairman Dennis Uy said in a statement.

Financial details of the acquisition deal were not disclosed and Chevron did not immediately reply to Reuters’ emailed request for comment.

Udenna disclosed the deal a day after Philippine oil and gas firm PXP Energy Corp said it had expressed interest to buy Chevron’s 45% interest in the Malampaya project.

PXP also said it had submitted an unsolicited proposal to the Philippines’ Department of Energy (DOE) to develop and utilize the Malampaya natural gas facilities in the South China Sea for a planned integrated gas hub venture.

The Malampaya gas field is expected to be depleted within the next decade and the consortium’s contract with the government will expire in 2024, but Shell wants it extended and has made a formal request with the DOE.

Malampaya can still produce gas beyond the contract expiry, a local Shell executive was quoted as saying by local media.

Reporting by Enrico dela Cruz; Editing by Susan Fenton

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