PXP Energy Could Buy Stake in Planned Philippines Terminal
Philippines’ PXP Energy, a unit of Philex Mining Corporation, could buy up to 49% stake in the LNG import terminal and gas-fired power plant proposed by Phoenix Petroleum and China’s Cnooc Gas and Power as part of the subscription agreement with Dennison Holdings.
Phoenix and Dennison are companies owned by Davao-based businessman Dennis Uy.
PXP told the Philippine Stock Exchange October 26 it signed a subscription agreement with Dennison for 340mn shares priced at peso 11.85/share ($0.22/share). The subscription price represents a discount of 20% to the 90-day volume weighted average price of PXP’s shares. Furthermore, Philex Mining Corporation also signed the subscription agreement for 260mn shares of PXP at peso 11.85/share. After the subscription of Dennison and Philex to the private placement shares, Dennison will have a total ownership interest in PXP of 14.78%, while Philex will increase its shareholding in PXP from 19.76% to 25.91%.
“As a substantial consideration for the company agreeing to the subscription by Dennison, Dennison shall cause its affiliate or related party, Phoenix Petroleum Philippines, Inc., subject to its board approval and consent of China National Offshore Oil Corporation (Cnooc), to grant certain preferential rights to the company or to any of its affiliates to acquire up to 49% of the equity, interest or participation of Phoenix Petroleum and/or its affiliates in the contemplated joint venture or related agreement with Cnooc for the construction, development, and operation of a liquified natural gas terminal and gas fired power plant in the Philippines,” PXP said.
In June, Phoenix Petroleum, signed a memorandum of understanding with Cnooc Gas and Power, a unit of China’s Cnooc to develop an LNG import terminal. Tanglawan Philippines LNG, joint venture company of Phoenix and Cnooc, has submitted a technical and financial proposal to develop the country’s LNG hub.
Philippines is looking to develop its LNG infrastructure as it needs to keep gas-fired generating assets viable – and attract new investments – after Malampaya, the country’s only commercial gas field, dries up in the next five or six years.
Earlier this year, Australia-listed Energy World Corporation (EWC) said it has 90%-completed its 130,000 m3 capacity LNG hub terminal in the Philippines. The facility, on Pagbilao Island in Quezon province, is some 90 km southeast of Manila and capable of handling up to 3mn metric tons/yr of LNG.