Latest news with #naturalGas
Forbes
7 hours ago
- Business
- Forbes
Billionaire Enrique Razon To Buy 60% Stake In Lopez Group's Gas Assets For $896 Million
Prime Infrastructure—controlled by casino-to-ports billionaire Enrique Razon Jr.—has agreed to buy 60% of the gas assets of the Lopez family-backed First Gen for 50 billion pesos ($896 million). Under a term sheet entered into by both parties and subject to a definitive agreement, Prime Infra will buy the controlling stake in five existing gas-fired power plants and a sixth facility under construction with a combined capacity 3,247 megawatts, along with an offshore liquefied natural gas terminal, according to a document furnished to Forbes Asia. The assets are all located in Batangas province, south of Manila. The partnership will enable First Gen and Prime Infra to 'further nurture, enhance and expand their natural gas platforms,' helping to secure the country's energy independence, according to the document. The gas plants will boost the profile of Prime Infra, which owns a substantial stake in the Malampaya gas field. The company is investing $800 million on drilling and exploration to boost the output of Malampaya, which has been dwindling in recent years. Prime Infra's power assets include two existing solar farms with a combined capacity of 128MW and two hydroelectric plants, which will have a combined capacity of 2,000MW once completed. For First Gen, the partial sale will help bankroll the $9 billion it plans to invest to quadruple its renewable energy capacity to 13 gigawatts in the six years through 2030. First Gen derives 55% of its capacity from gas while the rest comes from wind, solar, hydro and geothermal. After spending about $1.2 billion in 2024, that included the purchase of the 165 MW Casecnan hydro power facility in Nueva Ecija, north of Manila, it has earmarked another $601 million in capital expenditures this year, with as much as 90% allocated for 140MW of geothermal capacity, while the rest will be spent on a 50MW solar project. The Razon-Lopez deal is the latest strategic partnership to shake up the Philippine energy sector following a $3.3 billion gas and LNG joint venture announced by billionaire Ramon Ang's San Miguel Corp. with Aboitiz Power and a unit the Manila Electric Co. With a real-time net worth of $12 billion, Razon also has interests in global port operator ICTSI and Bloomberry, which owns two casino resorts in Metro Manila. In 2022, he planned to list Prime Infra, which also provides water utility and waste management services, but decided to postpone the IPO due to unfavorable market conditions. Besides their interest in energy, the Lopez family, which has a net worth of $230 million, is also the controlling shareholder of ABS-CBN, once the country's largest broadcaster. It pivoted to online streaming and content sharing with other networks after Philippine lawmakers in 2020 rejected the media company's bid to renew its franchise.
WIRED
10 hours ago
- Business
- WIRED
Analysts Say Trump Trade Wars Would Harm the Entire US Energy Sector, From Oil to Solar
I also think the tariff on it is just as important as the uncertainty about not knowing where the end game is and what the tariffs are going to be. So, if you're on the manufacturing side of the renewables business, you're making investment decisions that have very long lives when you're building a manufacturing facility. Having that uncertainty around the investment climate and what the level of tariffs is going to be over the long-term just makes it more challenging to make all of those decisions. During the early part of this year, as this tariff war was starting, I had, like, biweekly calls from this manufacturer in Korea, just exasperated, saying, 'Doesn't the US government know that we're making long lead time decisions, and we need to have some sort of clarity around what the policy environment is going to be, not just for the next four years, but for the next 10 years?' The US is making it very challenging right now to make these types of investment decisions. Is there any US energy industry that benefits from trade tensions? I don't think anybody benefits, per se, from the trade tensions. Everybody, no matter what part of the energy sector you're in, is having to navigate the uncertainty around what the tariff levels are going to be. That said, the overall policy environment has changed to one that is more favorable for natural gas. The fact that we are an exporter of natural gas and have all of the domestic resources that we need makes it less impacted by tariffs than what other sectors are, like renewables. But even for E&P [exploration and production of oil and gas], they utilize steel in that process. There are tariffs on steel. Steel prices have gone up. It has a negative impact on all energy sectors. One part of this report that jumped out to me is you said that the US may be stuck with older technologies, especially when it comes to solar, while the rest of the world advances at a quicker pace. What's the long-term effect of that? Before I answer that question directly, let me just give you some context. We estimate that the cost of building a utility-scale solar project is about $1.15 a watt in the US. The comparable number in China is about 42 cents a watt. It's not surprising that the cost of building a solar facility in China is a lot less than the cost of building a solar facility in the US. What is very surprising when we put this data together is how much less expensive it is to build a solar project in Europe than it is in the US. It's about 70 cents a watt to build a solar facility in Europe compared to the US. So the US is almost 50 percent more expensive to build a solar facility than the cost of building it in Europe. And the biggest reason that it's more expensive here is because of all the tariffs that we have on solar. It's not the only reason, but it's the biggest reason. So we've already kind of penalized solar with the tariffs that we have in place.
Japan Times
a day ago
- Business
- Japan Times
Trump officials set for talks with Asia leaders on Alaska energy
Almost two dozen foreign officials are set to join top U.S. government leaders in meetings focused on Alaska's energy resources, as U.S. President Donald Trump encourages other nations to buy natural gas from the Frontier State. Foreign representatives visiting Alaska for the discussions in coming days are expected to include representatives from Japan, South Korea, Taiwan, Philippines, India and the United Arab Emirates, said people familiar with the matter, who asked not to be identified because they weren't authorized to speak publicly. The U.S. delegation will be led by Interior Secretary Doug Burgum, who's also the chair of Trump's National Energy Dominance Council; the panel's vice-chair, Energy Secretary Chris Wright; and Environmental Protection Agency Administrator Lee Zeldin, the people said. The trip is set to include visits to an oil pipeline and gas processing facilities on Alaska's North Slope as well as meetings with industry officials and indigenous people, they said. It comes as Trump moves to expand energy development in the state, a priority he outlined in an executive order hours after his Jan. 20 inauguration. And it coincides with a broad push by other nations to curry favor with the president, including through investment commitments, to ward off threatened tariffs. Trump has repeatedly touted the $44 billion Alaska LNG project, which is meant to transport natural gas across the state for export. Although it has been planned for decades, the project faces headwinds due to its large price tag, mammoth scale and the sheer challenge of constructing an 1,290 kilometer pipeline across Alaska. Trump pressed Japanese Prime Minister Shigeru Ishiba on the project during their meeting in February, winning his commitment to cooperate on strengthening energy security, "including increasing exports of United States liquefied natural gas to Japan in a mutually beneficial manner.' Representatives of the Philippines, Taiwan and South Korea also have been in talks with administration officials on the venture. Discussions are expected to unfold over several days, including during site visits at the prolific Prudhoe Bay oil field, which has pumped crude for roughly five decades, and where units of ConocoPhillips and Hilcorp Energy Co. have operations. Other conversations are expected in Utqiagvik and Anchorage, including as part of Governor Mike Dunleavy's Alaska Sustainable Energy Conference. Trump officials see the visit as a chance to highlight the administration's focus on unleashing Alaska's energy abundance and draw a contrast with policies under former U.S. President Joe Biden they say locked up the state's oil, gas and mineral potential. While Alaska LNG will be a significant portion of the discussions, a person familiar with the matter said, there's an opportunity to examine the state's resource potential and further policy shifts that can help deliver it.
Bloomberg
a day ago
- Business
- Bloomberg
Trump Officials Set for Talks With Asia Leaders on Alaska Energy
Almost two dozen foreign officials are set to join top US government leaders in meetings focused on Alaska's energy resources, as President Donald Trump encourages other nations to buy natural gas from the Frontier State. Foreign representatives visiting Alaska for the discussions in coming days are expected to include representatives from Japan, South Korea, Taiwan, Philippines, India and the United Arab Emirates, said people familiar with the matter, who asked not to be identified because they weren't authorized to speak publicly.
Forbes
a day ago
- Business
- Forbes
Upstream Natural Gas Valuations: A Big Year
The electron precedes the molecule or so the saying goes. Well, that is not really an axiom to my knowledge, but it does seem to fit. Amid the uncertainty in oil markets, for the past year or so, optimism and valuation metrics for natural gas producers have steadily been rising. According to data from Mercer Capital's quarterly Value Focus: Exploration and Production, reports whereas a year ago show cash flow multiples (or sometimes referred to as EBITDAX in the oil and gas industry) for both oil and gas producers tended to centralize around four (4) to five (5) times, lately, publicly traded gas producers have EBITDAX multiples in the low- to mid-teens, while predominately oil producing companies' multiples have dropped. Oil & Gas EV/EBITDAX Multiples Q1 2024-Q1 2025 This has been a dramatic change in the past year compared to the industry's history. While onshore producers of oil and gas have many similar operational and economic traits, such as the shrinking inventory of top tier wells, this decoupling is representative of a fundamentally different outlook for the future of each commodity. Demand: Record Gas Demand Is Headed For More Gas has a bright future as a commodity as one of its key consumption outlets, electricity, is at an all-time high and is growing. The EIA reported a few weeks ago that after decades of relatively flat electricity demand, the desire for more current, volts, and ohms will be required for commercial growth, onshoring of manufacturing, and, of course, data centers that fuel A.I. Much of this is anticipated to be in other forms such as solar, but natural gas will be a part of this equation with 4.4 gigawatts of new natural gas-fired capacity to be built in 2025. U.S. Electricity Consumption 1990-2026 This is not short term either. The EIA also estimates electricity demand to grow by around 50% by 2040 in its latest Annual Energy Outlook. This should take some time to translate into measurable gas demand and potential price increases, which partially explains why EBITDAX multiples for companies such as Comstock Resources are relatively high. East Daley Analytics, an energy infrastructure consultant, claims that the gas market will operate in a cautious holding pattern for the time being. However, when LNG expansion terminals ramp up and electricity demand really picks up, the markets will tighten, especially in pricing hubs connected to export markets. LNG growth remains a bulwark for future natural gas demand growth from around the world, not just domestically. Market participants anticipate this as well. In the latest Dallas Fed Energy Survey projections suggest that gas prices, although not expected to get to $ per mcf like some executives would prefer, are headed towards $4.00 per mcf. Perhaps that is fueled by larger geopolitical developments such as the EU proposing a blanket ban on Russian natural gas. What do you expect Henry Hub natural gas prices to be in six months, one year, two years and five ... More years? Infrastructure Activity Ramping Up These dynamics are driving activity within multiple related segments of the marketplace. Just this week Hart Energy reported that the long embattled Constitution Pipeline in the Northeast United States is back on the table for Williams Companies. That's right, Williams is attempting to re-petition federal and state authorities for the Northeast Supply Enhancement project after Governor Kathy Hochul agreed to show openness to the construction of natural gas infrastructure in New York. Williams is also pursuing growth in its Transco system as well. Plus, in the past 45 days the Calcasieu Pass, Louisiana LNG facility launched commercial operations. That is just 68 months after its August 2019 final investment decision, a relatively quick turnaround for a project that large. In addition, the electrical utility and generation space has ramped up merger and acquisition activity. Blackstone is acquiring TXNM Energy, NRG Energy is acquiring generation assets from LS Power, and Vistra Corp. is buying 2,557 megawatts of natural gas generation assets from Lotus Infrastructure Partners for around seven (7) times EBITDA. In the last year where merger and acquisition activity has been slow, this is an optimistic indication of more building and buying to come. Supply: Good Inventory Shrinking While Efficiency Wanes Even though the U.S. has a lot more gas reserves relative to oil, there are only so many low cost wells that are profitable at gas prices below say $3.00 per mcf. Although, technology, particularly fracking, has been revolutionizing the industry, it is now around 20 years in. As my fellow Forbes columnist, Ian Dexter Palmer showed last week, fracks are long, complex, and use a lot of water and resources. Even so, the best locations are dwindling, and it will get more and more difficult to keep capital efficiency high on a per well basis. One investor group, Kimmeridge, put out a paper on this very issue a few weeks ago. The data is fascinating. While oriented towards analyzing remaining oil inventory, it covers gas too, and it demonstrates that core shale acreage in the United States is being exhausted based on estimated ultimate recovery of resources per foot of rock. In addition, the operating costs to find and develop oil and gas as compared to the operating cash flow, what Kimmeridge refers to as the 'recycle ratio,' started shrinking a few years ago and are projected to continue to shrink. This makes drilling more economically inefficient and thus incentivizes operators to wait to drill until prices make it worthwhile. There are some formations that have more runway than others, but overall, it will become increasingly difficult for an operator to drill a relatively inexpensive well. Kimmeridge mentions the Marcellus Shale as one field with a good amount of high-quality acreage remaining, but that is more of an exception than the rule according to the paper. Blending that with the increasing demand I mentioned earlier, it is a recipe for higher natural gas prices going forward. Add all of this up and it seems investors see cash flows picking up significantly in the future for upstream natural gas producers. It shows in robust EBITDAX multiples that investors in Expand Energy, EQT, Comstock Resources, Range Resources, Antero Resources, and the like appear to be eagerly looking forward to what comes next.
