First Gen to break ground on US$1.0-B LNG terminal project

Published May 1, 2019, 12:00 AM

by manilabulletin_admin

By Myrna M. Velasco

After years of pre-development works, the planned US$1.0- billion liquefied natural gas (LNG) terminal project of First Gen Corporation will finally break ground as targeted by the end of this month – and such also signals for it moving subsequently into construction phase.

First Gen logo

The Lopez company is inviting Energy Secretary Alfonso G. Cusi to lead the groundbreaking rites at the project site in Batangas, according to information shared to the media. Frond-end engineering design (FEED) on the project has already been completed.

The Department of Energy (DOE) similarly indicated that the planned scale of investment was still set at US$1.0 billion at the issuance of FGEN LNG Corporation’s notice-to-proceed (NTP) for the project in March this year.

Around October last year, the FGEN LNG undertaking was also granted certification by the Board of Investments (BOI) as a venture with pioneer incentives pursuant to the provisions of Article 17 of Executive Order No. 226.

FGEN LNG will be pursuing the import terminal facility in partnership with Tokyo Gas Co. Ltd. which cornered 20 percent shareholdings in the company’s corporate vehicle via the joint development agreement (JDA) signed by the parties December 5 last year.

The FGEN LNG venture will basically lean on the technical expertise as well as on the supply of LNG that the Japanese partner would be able to bestow in the project’s implementation and eventual commercial operations.

First Gen’s targeted market on the LNG import terminal will be its existing gas-fired plants in Batangas – the 1,000-megawatt Santa Rita, 500MW San Lorenzo; 414MW San Gabriel and 97MW Avion plants.

Three of the companies’ gas-fired power plants have existing power supply agreements with the Manila Electric Company (Meralco), but when the off-take deals for the Santa Rita and San Lorenzo plants will expire in 2025 and 2027, First Gen can still offer them to the utility firm within the ambit of competitive selection process (CSP) being instituted as policy for distribution utilities in their supply procurements.

The propounded LNG import facility will also have room to cater to other gas end-users, including the Ilijan gas plant of South Premiere Power Corp, a subsidiary of the San Miguel group; plus a host of prospective industrial end-users.

The Lopez group, on its own, is also eyeing to take off two more gas-fired power projects from blueprint – its proposed Santa Maria and Saint Joseph gas-fed power facilities that may have capacities of 414MW each.

The Philippine power system’s need for gas capacity is highly anticipated given the targeted increase in integration of renewables across grids – in which gas is the viable complement to the intermittency of RE generation.