A Brown Company Inc.’s (ABCI) subsidiary Vires Energy Corp. notified the Department of Energy on Friday that it is withdrawing its plan to build a liquefied natural gas (LNG) terminal and a regasification facility in Barangay Simlong, Batangas City.
A Brown said in a disclosure to the stock exchange that Vires would redirect its focus towards power generation and the pre-development of a 900-megawatt LNG combined cycle power plant, which is in the planning stages and will be constructed on a 15-hectare onshore site replacing the initially proposed floating power plant design.
“The withdrawal of the NTP, therefore, will not prejudice the LNG project and will instead be a step forward on the development of the project,” the company said.
It said Vires decided, given the recent industry developments, to forego constructing an LNG terminal and instead adopt the third-party access (TPA) model, which involves the purchase of gas from third-party gas sources through long-term gas supply agreements.
“It has been determined that the adoption of the TPA model will give the optimal approach for the VEC project moving forward,” A Brown said.
“This model will leverage existing gas infrastructure in the Batangas area to support the development of new power plants and will also shorten the time when power generation can happen since VEC will no longer need to construct an LNG Terminal,” it said.
A Brown said the Vires site in Barangay Simlong is strategically located along the Batangas Bay and is evaluating the best way to connect to the existing gas pipelines to access gas from third-party LNG terminals and indigenous gas supply from Malampaya.
A Brown previously acquired 99.995 percent of the outstanding capital of Vires owned by Argo Group Pte. Ltd. of Singapore for P50.2 million.
“The acquisition of Vires Energy reflects our confidence in the role of natural gas in providing for a clean and cost-effective energy source. We are excited to push the project forward,” A Brown chairman Walter Brown said earlier.
Brown said the acquisition would increase the investment of the company and raise revenue from the return on investment in the future.
A Brown serves as the holding company of the Brown Group of Companies. It is primarily engaged in the business of real estate development in Cagayan de Oro City and Initao in Misamis Oriental; Cainta, Rizal; Valencia City, Bukidnon; and Butuan City, Agusan del Norte.
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