TOKYO GAS Co., Ltd., Japan’s largest natural gas utility company, has completed its acquisition of a 20% equity stake in FGEN LNG Corp., the liquefied natural gas (LNG) terminal subsidiary of Lopez-led First Gen Corp.
“This subscription will deepen our partnership and enhance synergy that will boost our efforts in support of the Philippines’ energy security and stability, even as we all pursue decarbonization,” Francis Giles B. Puno, vice-chairman and chief executive officer of FGEN LNG and concurrent president of First Gen, said in a statement on Wednesday.
The acquisition marks the Japanese company’s first investment in a commercially operational liquefied natural gas terminal project overseas. First Gen did not disclose the transaction amount.
Tokyo Gas is one of the world’s largest LNG buyers, with an annual purchase volume of 13 million tons.
It operates over 63,000 kilometers of gas pipelines, serving approximately 8.8 million customers.
In May last year, First Gen LNG Holdings Corp., a wholly owned subsidiary of First Gen, executed a shareholders’ agreement and a share subscription agreement with Tokyo Gas for the latter to subscribe to shares in FGEN LNG.
Upon effectivity, FGEN LNG Holdings will hold an 80% stake, while Tokyo Gas will own the remaining 20% in FGEN LNG.
FGEN LNG is the owner and operator of the offshore LNG terminal project located within First Gen’s Clean Energy Complex in Batangas City.
Before the acquisition deal, Tokyo Gas partnered with First Gen in December 2018 for the development and construction of the terminal, which broke ground in May 2019.
Earlier this year, the company secured a permit from the Department of Energy, allowing it to operate and maintain its interim offshore LNG terminal for its own use for 25 years.
For the nine months ending in September, First Gen’s attributable net income fell by 16.1% to $39.8 million due to lower contributions from its renewable energy business.
Gross revenues went down by 5.9% to $568.48 million while gross expenses increased by 3.5% to $1.46 billion.
First Gen and its subsidiaries are primarily engaged in the power generation business and operate power plants that run on geothermal, wind, solar, hydro, and natural gas.
At the local bouse on Wednesday, shares in the company closed unchanged at P16.98 each. — Sheldeen Joy Talavera
