SMC Global raising capital for Batangas LNG terminal

SMC Global Power Holdings Corp. is raising $400 million from the issuance of senior perpetual capital securities to fund, among others, its entry into the liquefied natural gas (LNG) business.

“The net proceeds of the 2020 Securities will be used for capital expenditures and investments in LNG and related assets, for the refinancing of expiring commitments of the Corporation whether debt of perpetual securities, and for general corporate purposes,” the company’s Chief Information Officer Elenita Go said.

The securities carry an initial rate of 7 percent per annum.

The company has tapped Credit Suisse Ltd., DBS Banl Ltd., Merrill Lynch Pte. Ltd., The Hongkong and Shanghai Banking Corp. Ltd., Mizuho Securities Asia Ltd., Standard Chartered Bank, Deutsche Bank Ag, Singapore Branch and UBS AG Singapore branch, as Joint Lead Managers; DB Trustees Ltd as Trustee; and Deutsche Bank AG, Hong Kong Branch, as Paying Agent.

SMC Global Power earlier said it will partner with Atlantic Gulf & Pacific (AG&P) for its LNG project in Batangas.

The company’s planned Ilijan LNG Terminal will be developed by AG&P LNG Terminals and Logistics, with engineering, procurement and construction (EPC) work to be handled by AG&P Construction Solutions.

As of August this year, the company is in advanced stages of executing a binding term sheet on the Terminal Use Agreement with AG&P to provide LNG receiving, storage and regasification services to the Ilijan Power Plant and Ilijan Expansion Project.

The LNG terminal’s commercial operation is targeted in June 2022, in time for the expiration of the Ilijan independent power producer agreement (IPPA).

SMC Global Power, through its subsidiary South Premiere Power Corp., is the IPP administrator of the output of the 1,200MW Ilijan plant.

Ilijan is among the gas plants fueled by the Malampaya natural gas facility, which is nearing the end of its service contract in early 2024.

The proposed LNG facility is composed of Floating Storage and Regasification Unit (FSRU). The power plant component of the project is capable of handling 3,000 megawatts (MW) of capacity. Of which, 1,200MW is for baseload operations and 1,800MW for mid-merit.

It will utilize hybrid onshore/offshore solution using modular technology, resulting in a cost effective EPC cost and consequently, a viable terminal use fee for the power plants.

The power firm has negotiated “priority status” for the Ilijan LNG Terminal over all projects of AG&P. “As the foundation customers, SMC’s power plant will also be the priority terminal users for the terminal and its capacity,” it said.


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