First Gen sets $35-M initial capex for LNG terminal

Published May 11, 2018, 12:00 AM

by manilabulletin_admin

By Myrna M. Velasco

Deciding finally that it will put up its own liquefied natural gas (LNG) onshore terminal, the Lopez group has already earmarked initial $35-million capital expenditure (capex) for preliminary engineering works on the planned US$1.0 billion import facility.

“We can now focus most of our effort into the development of the LNG…we’ve been proactively developing it in the last five years,” First Gen President and Chief Operating Francis Giles B. Puno said.

First Gen logo

On the programmed capex this year, First Gen Chief Finance Officer Emmanuel Singson noted that $20 million will be funneled to LNG capital spending; and $15 million for the rest of adjustment works at San Gabriel power plant, such as those on its warehouse and the storage that the company had previously postponed.

Aside from preliminary engineering works done at the LNG project, the Lopez group is also advancing on its selection of joint venture (JV) partners and turnkey contractors.

“We are negotiating with a shortlist of contractors. What we are going to do is pursue what we can – an early contractor involvement,” Puno explained.

He pointed out that since actual financial closing has yet to happen, “we will be paying these contractors to do detailed engineering for the LNG terminal.”

The planned LNG import terminal is for 5.0 million tons per annum (mtpa) capacity and would be able to meet all the gas supply needs of power plants running on such technology in the country – with room even for expansion projects.

On its JV partner, the company indicated that it is now becoming a shorter version of the shortlist, although it remains an open-ended proposition especially if a better offer would come in the process.

“Ideally, we bring in maybe at least one foreign partner and potentially local partners as well…we don’t have to solely underwrite this transaction,” he stressed.

Puno further opined “we’re still of the view right now that the option to finally invest in the LNG terminal in Batangas is probably the most realistic option today.”