By Myrna M. Velasco
Lopez-owned First Gen Corporation will ink next a definitive agreement with partner Tokyo Gas Co. Ltd. before they could finally proceed into the construction phase of their blueprinted liquefied natural gas (LNG) import terminal.
“Parties will enter into a definitive agreement regarding the construction of the LNG terminal,” the Lopez firm has indicated in an information submitted to the Philippine Stock Exchange.
It further noted that such phase of the project’s implementation will signal the final investment decision (FID) that the parties will be rendering on the LNG venture.
Fundamentally, the project of the First Gen-Tokyo Gas tandem is the most advanced among all planned LNG import facilities in the country and it is the only one that is at its tangible shovel-ready juncture.
The venture is already past through front-end engineering design (FEED) and the project site in Batangas is ready – proximate to the existing gas plants of First Gen.
The next steps for the joint venture project sponsors then will be the selection of engineering, procurement and construction (EPC) contractor and financial closing. For the EPC contract, First Gen previously shortlisted two firms; but on project funding, it has yet to identify the lenders.
The parties have not fully disclosed yet the project’s configuration – such as if the 5.0 million tons per annum (mtpa) capacity be adjusted or if there will be changes in the targeted US$1.0 billion project financing.
Its partner Tokyo Gas, according to First Gen, “will provide support in development work.” The Japanese firm has 20-percent equity in FGEN LNG Corporation, the project’s corporate vehicle; while First Gen holds the majority of 80-percent.
The Lopez group vouched of the 50-year experience that its chosen partner holds in the liquefied natural gas industry, noting that Tokyo Gas “is a global gas utility and a leader in the LNG industry.”
In terms of LNG procurement and overall industry experience, Tokyo Gas has 15 million tons per annum on its portfolio; four terminals for regasification; and 11 LNG carriers that it currently owns and under construction.
Aside from the Philippines, the Japanese firm is involved in LNG projects in at least 35 countries – either as equity partner or is engaged in consulting services.
For First Gen, the construction of the LNG terminal could also signify its eventual decision to pursue two more gas-fired power projects – its targeted Santa Maria and Saint Joseph plants; and its terminal also intends to cater to other gas users in the country.