Big Purchase: Enrique Razon Takes Majority Stake in Dennis Uy’s Malampaya Project
In a bold business move that will take the power industry by storm, Billionaire Enrique Razon is set to acquire major shares in Dennis Uy’s Malampaya gas-to-power project.
After news of Enrique Razon investing in Dennis Uy’s Clark and Cebu-based casinos, the billionaire is gearing up for yet another big purchase—specifically a large stake in Malampaya gas-to-power project, which is controlled by Davao businessman Dennis Uy’s Udenna Corp.
In a statement made on Thursday, June 2, Razon’s infrastructure arm Prime Infra Holdings Inc. confirmed that the acquisition process has already begun. Moreover, it’s a close deal—subject to consent from parties like the Department of Energy and Philippine National Oil Company Exploration Corporation (PNOC-EC), which maintains a 10% stake in the gas field.
“The entry of Prime Infra into the natural gas industry aligns with its purpose to create better lives and resilient economies through critical infrastructure—coupled [with] its aspiration to help its customers transition to cleaner energy resources to fuel the economic growth of the Philippines,” said the company.
Venturing Into the Natural Gas Industry
Set off the coast of Palawan, the Malampaya deep-water gas-to-power project began operations with a first offshore platform in 2001. Heralding the birth of the natural gas industry in the Philippines, it uses indigenous fuels or natural gas—the cleanest-burning hydrocarbon—which reduces the need for imported oil. To date, it’s responsible for up to 20% of the country’s electricity requirements, which helps maintain national energy security.
Uy currently holds 90% of the project through UC Malampaya Philippines Pte Ptd, which purchased the 45% stake that was previously owned by Shell Exploration BV and Chevron. However, Malampaya’s service contract will be expiring in 2024, making Prime Infra’s entry “critical” for the project’s continuous operation.
Through this extension, Prime Infra said that it plans on investing in Malampaya’s expansion. That way, it can sustain the economic and social benefits it provides the Philippines. “[T]here is a sense of ownership to achieving national energy independence when you bring in Filipino companies to handle the reins of a critical power infrastructure and this is what Prime Infra aims to do with our participation in Malampaya,” Razon explained.
“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,” he added.
Environmental and Social Advantages
According to the port tycoon, the Malampaya project ticks off their environmental, social, and governance checklist, as it allows them to contribute to the country’s transition from coal to “affordable cleaner and domestic energy resources” like natural gas.
Likewise, Uy was optimistic about Razon’s participation in the Malampaya project. “We look forward to this opportunity to partner with Prime Infrastructure and PNOC EC, as we explore more ways to fulfill our common vision to make Malampaya sustain its capability to meet the urgent energy security need of the Philippines,” he said.
Although the Udenna Group drew criticism for its purchase of shares in Malampaya—with senators questioning the legality of the transaction—the company insisted that the move was legal and has even garnered support from former President Rodrigo Duterte himself.