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The Department of Energy’s (DOE) decision approving the transfer of shares of Malampaya operator Shell Philippines Exploration B.V. (SPEX) to a subsidiary of Prime Infrastructure Capital Inc. (Prime Infra) marks the initial foray of Enrique K. Razon Jr’.s infrastructure arm into the upstream energy market, fulfilling its purpose to make better lives and resilient economies through critical infrastructure.

In July 2022, Prime Infra’s Prime Exploration Pte Ltd entered into a share purchase agreement acquiring MEXP Holding Pte. Ltd. (MEXP). MEXP had previously signed an agreement to acquire 100% shares of SPEX, which the DOE recently approved.

Prior the DOE approval, consents were given by the joint venture partners in the Malampaya SC38 consortium, UC38 LLC and the PNOC Exploration Corporation (PNOC EC).

“We welcome DOE’s thorough review and subsequent approval of the SPEX sale given the urgency to sustain the operations of Malampaya—a vital energy installation and symbol of national pride—and to plan for the further development of the existing reserves in light of the current power under supply. We will contribute by doing all that can be done to produce as much gas as possible to sustain production in support of the power demand in Luzon,” said Razon, chairman of Prime Infra.

“Prime Infra’s energy portfolio has always been aligned with the national government’s objective towards attaining energy independence and security, while reducing the country’s reliance on fossil fuels. Prime Infra is well-positioned to carry on the world renowned track record of the Malampaya asset and therefore, the next urgent step for the company is to sustain and expand gas production while we promptly address the license extension for SC38,” said Prime Infra President and CEO Guillaume Lucci.

Prime Infra will assume full ownership and control of SPEX once the transition process for a safe and seamless handover of operations from Shell is completed currently targeted for November 1, 2022.

Prime Infra had committed to deliver outstanding operational performance and further the potential of SC38 covering the Malampaya deep-water gas-to-power project to ensure continuity of production as long as the reserves support it.

The Malampaya project is one of the country’s most important power assets, as it produces natural gas to power plants in Batangas City that power up to 20% of the Luzon’s total electricity requirements. It began operations in 2001, with the consortium’s license for the project set to expire in 2024.