The Philippines’ Oil & Gas Sector Witness Two Deals with MNCs

The oil and gas industry in the Philippines has witnessed sale of their stake in part to multinational companies in the last 24 hours.

While Saudi oil giant Aramco re-entered the Philippines market by acquiring a 25% stake in Unioil Petroleum, First Gen Corp has completed the sale of a 20% stake in its offshore liquefied natural gas (LNG) terminal in Batangas to Japan’s Tokyo Gas Co. Ltd.

In the first deal, Aramco, one of the leading integrated energy and chemical companies worldwide, and Unioil, a major petroleum player in the local sector, said that no target timeline has been disclosed yet, as the transaction remains subject to closing conditions and regulatory approvals.

Aramco said that it wanted to invest in the country again to cash in on the anticipated growth of the high-value fuels market in the Philippines.

Aramco executive vice president of products and customers Yasser Mufti said that their investment represented another step forward in the company’s global strategy to expand its retail network, and was looking forward to introduce their high-quality products and services to customers in the Philippines.

This move came almost 17 years after Aramco exited Petron Corp. Unioil has been in the market since 1966, allowing it to expand its fuel products across the country.

Second Deal

In the second deal, Tokyo Gas acquired 20% stake in First Gen Unit First Gen LNG Holdings Corp. after the tho companies executed share subscription and shareholder’s agreements in May 2024 involving FGEN LNG Corp, which owns and operates the LNG terminal.

First Gen president and COO Francis G Puno said that this subscription will deepen the partnership and enhance synergy that will boost their efforts in support of the Philippines’ energy security and stability, even as they were pursuing decarbonisation.

The acquisition marks Tokyo Gas’ first-ever investment in a commercially operational overseas LNG terminal, although financial details have yet to be disclosed. Tokyo Gas is Japan’s largest natural gas utility company and is among the world’s largest buyers of LNG, with an annual volume of 13 million tons.

Before this transaction, First Gen partnered with Tokyo Gas in December 2018 to construct the LNG terminal, which was completed in 2023.

Recently, the Department of Energy granted FGEN LNG the permit to operate and maintain the LNG terminal for 25 years.

The project consists of a multi-purpose jetty and an onshore gas receiving facility representing the initial phase of the FGEN LNG terminal that was certified by the government as an energy project of national significance.

First Gen utilises LNG for its four gas-fired power plants with a combined capacity of over 2 GWlocated at the First Gen Clean Energy Complex. LNG is deemed a transition fuel to help the country shift away from coal-fired power plants while setting the stage for a wider adoption of renewable energy in the long term.

First Gen completed its first LNG cargo delivery in August 2023 and made subsequent deliveries in December 2023 as well as in February, May and October 2024.