LOPEZ-LED First Gen Corp. is moving forward with the sale of its gas assets to Razon-led Prime Infrastructure Capital, Inc. (Prime Infra) following the signing of a share purchase agreement.

Under the deal, Prime Infra will acquire a 60% stake in First Gen’s subsidiaries that hold its gas-fired power assets. The agreement formalizes a strategic partnership between the two companies and follows a term sheet signed on May 30.

Prime Infra will pay P50 billion for the 60% stake upon closing of the transaction, according to earlier disclosures. The final amount is subject to adjustments and conditions agreed by both parties.

Once completed, the transaction will give Prime Infra a controlling interest in First Gen’s gas-fired power plants in Batangas: the 1,000-megawatt (MW) Santa Rita, 500-MW San Lorenzo, 450-MW San Gabriel, and 97-MW Avion plants.

These plants are all currently supplied by the Malampaya gas field, which is operated by Prime Energy Resources Development B.V., a unit of the Razon group.

The acquisition also includes the proposed 1,200-MW Santa Maria power plant and an interim offshore liquefied natural gas (LNG) terminal.

First Gen will retain a 40% stake in the gas plants to ensure “proper continuity and stability of its gas operating plants.”

For the LNG terminal, First Gen and Japan’s Tokyo Gas will each hold a 20% stake, while Prime Infra will own the remaining 60%.

The company said it is entitled to receive additional earnout payments if certain conditions are met.

The transaction is subject to the approval of the Philippine Competition Commission and other closing conditions. Both companies said they aim to complete the deal “soon.”

Following the acquisition, First Gen is expected to have more financial capacity to expand its renewable energy portfolio.

“We have always believed that natural gas is the most practical fuel to transition ourselves to a future of renewable energy,” First Gen Chairman and Chief Executive Officer Federico R. Lopez said in a statement last month.

“Our continued presence in LNG underlines our view of its important role in maintaining the country’s energy security and at the same time enabling the adoption of more renewable energy,” he added.

First Gen has an installed capacity of 3,668 MW, accounting for about 18% of the Philippines’ gross power generation. The company aims to expand its capacity to 13 gigawatts by 2030.

Prime Infra is the infrastructure arm of the Razon group, with business interests in power generation, water utilities, and waste management. — Sheldeen Joy Talavera