Malaysia's Petronas, through its principal marketing arm, Petronas Dagangan Berhad, has signed a memorandum of understanding to sell Petronas Energy Philippines Inc.'s LPG and lubricant businesses to Phoenix Petroleum Philippines Inc.
Petronas Energy Philippines Inc. (PEPI) has a combined storage capacity of 3,436 metric tonnes in four LPG terminals in the Philippines.
Phoenix Petroleum has no direct business in the area of LPG and has mainly distributed fuels for the automotive and aviation sectors. With this purchase agreement, Phoenix Petroleum will join other established LPG suppliers, including Petron, Liquigaz, Isla LPG and South Pacific Inc.
Raymond Zorrilla, Phoenix Petroleum vice-president for external affairs, said the company is set to seek the approval of the Philippine Competition Commission (PCC) for the said deal.
"We just signed the MOU and we will proceed with the discussion on the commercial terms and we can only disclose upon execution of the shareholders' purchase agreement," Zorilla said.
Operating in the Philippines for more than 20 years, PEPI is engaged in the business of selling LPG in cylinders for household and commercial use as well as LPG in bulk for industrial use and autogas, an environment-friendly alternative fuel for vehicles.
"We are very excited about this asset not only because it represents a new product that Phoenix can offer but also because we know that it has been operated in line with the operating standard of PETRONAS, a Fortune 500 company," Dennis Uy, president and CEO of Phoenix Petroleum, said.
The acquisition of Petronas’ LPG business is consistent with Phoenix's goal of becoming one of the leading oil and gas players in the Philippines, he said.
Phoenix Petroleum aims to build significant presence in the “non-fuel” segment, which currently accounts for about 1% of the company's business.