In the coal plant ban rally market forgets to include ANS

The Department of Energy (DOE) announced yesterday that it has declared a moratorium on new coal power plant projects. The decision to halt the approval of applications for greenfield coal-fired power plants was to address the need of the country for a shift to a more flexible power supply mix as well as to accommodate the entry of new, cleaner, and indigenous power sources. 

The DOE declaration had natural gas plant operator First Gen Corporation (FGEN) soared to a day high of 29.50 and closed at 29.30 on October 28, 2020 trading, jumping 10.98% on that day.  While pushing coal miner and coal plant operator Semira Mining & Power Corporation down by 7.89%.

The moratorium on new coal plants is a vindication to Piki Lopez, who steered FGEN into natural gas and renewable energy when everyone else like the Aboitizes, Ayalas, and Manny Pangilinan were busy building massive coal plants.  At FGEN Piki Lopez made it clear that the future of power generation is renewable.  That is why FGEN invests heavily in solar, wind, hydro, and geothermal. FGEN theorized that absent a reliable power storage technology, flexible natural gas plants can provide the missing power quickly when there is not enough sunlight and when the wind doesn’t blow hard enough.  It only takes minutes for a natural gas plant to start up, making it flexible enough to adjust to shifting power demands. The strategy of marrying natural gas with renewable energy makes a cleaner and better combination creates shareholder value.

While the market anticipates that as a result of the moratorium there will be a boom on natural gas projects, it forgets a company that has well positioned in the natural gas projects boom.

A. Soriano Corporation (ANSCOR, ANS) is an investment holding company that is engaged in venture capital investing aside from its hedge fund-like operations.

ANS incubated several companies.  Among the companies it incubated are: international port operator International Container Terminal Services Inc. (ICT) together with Enrique K. Razon, Asian Bank which it sold to Metrobank (MBT), AB Capital Investment which it sold to the Metro Retail Group/Gaisano group, Business Process Operator Spi Technologies, and Atlas Mining (AT).  ANS exited their stakes on those ventures at hefty gains.

Seeing a boom in natural gas, ANS invested in AG&P International Holdings Limited. ANS owns 27.07% of AG&P.  Headquartered in Singapore, AG&P is one of the world’s fastest-growing providers of LNG import and LNG and gas logistics, distribution, and infrastructure solutions. AG&P offers its customers pragmatic solutions to their infrastructure challenges that lower costs, make installation easy, accelerate construction schedules and increase certainty of outcome, allowing assets to become operational quickly. AG&P’s services include development, engineering, procurement and construction for onshore and offshore gas infrastructure, LNG logistics, LNG marketing and delivery of natural gas straight to industrial, commercial, vehicular and domestic customers.

In fact, San Miguel’s (SMC) SMC Global Power Holdings Corp. commissioned AG&P to construct a liquefied natural gas (LNG) terminal beside its Ilijan power plant in Batangas City. SMC Global Power Holdings Corp. said that the terminal would be developed by Atlantic Gulf and Pacific’s (AG&P) LNG Terminals and Logistics division and its Construction Solutions division would handle the engineering, procurement and construction work.

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Disclaimer and Disclosure: This is an independent analysis for discussion purposes with the aim of giving stock traders and investors an independent viewpoint.  Accuretti Systems Inc. in day to day trading may have owned, or is considering buying or disposing, the shares of the companies mentioned in this commentary.

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