The move is meant to promote cleaner energy in the country and ensure cost-efficient power for the people with liquefied natural gas.

As the demand for power is expected to grow by 6.6%, three of the country’s biggest power companies have signed a deal to launch the Philippines’ first liquefied natural gas (LNG) facility. These power companies are none other than Aboitiz Power Corp., Meralco PowerGen Corp. (MGen), and San Miguel Global Power Holdings Corp. (SMGP). 

“For the first time, three leading power companies are working together to secure our country’s energy needs while transitioning toward cleaner power sources,” SMGP Chairman and President Ramon Ang said in a statement. 

According to Manuel “Manny” Pangilinan, who is the chairman of MGen, “Apart from transforming the energy landscape of the Philippines, this symbolizes a milestone alliance among major players in the energy industry toward a more sustainable future.” 

How the Deal Works 

The country’s first LNG facility will be located in Batangas and will be used to receive, process, and store LNG. This will be for the two power plants that supply electricity for the main island of Luzon, according to a report by the Inquirer. 

Under the deal signed by the three companies, MGen and Aboitiz Power will invest in a Ilijan gas-fired power plant as well as a new facility owned by SMGP. They will then acquire almost 100% of the LNG import and regasification terminal that received the Philippines’ first LNG cargo delivery last year. This terminal is owned by Linseed Field Power Corp.

What This Means for the Philippines 

With only 13% of the country’s installed power capacity attributed to natural gas, the landmark deal signed by the three powerhouse companies guarantees a more secure energy supply for the Philippines, especially as demand for power is projected to grow. As the Inquirer notes in its report, supply for energy is expected to still be tight this year. 

This deal can likewise encourage other entrepreneurs to study and explore business opportunities that come with renewable energy. As the country continues to be heavily dependent on coal, exploring such opportunities can ensure more sustainable power for the country.