Lopez-led First Gen Corporation has earmarked the lion’s share or around US$300 million of its capital spending this year until 2021for its liquefied natural gas (LNG) import terminal project.
In the company’s annual stockholders’ meeting, First Gen President and COO Francis Giles B. Puno emphasized that “the main driver for our capex program is the LNG terminal and the estimated cost of this is around US$300 million.”
Of the programmed capital outlay, he noted that US$60 million had already been spent; while the remainder “will be disbursed over the next 2-3 years.”
The initial phase of the LNG terminal project, which is in the form of floating storage and regasification unit (FSRU), is targeted to reach commercial operations in the third quarter of 2022.
The company said it is cognizant of realities that “the Covid-19 situation will most likely impact the global supply chain which could lead to some delays in the manufacturing of equipment, but we are looking to start construction by this quarter.”
Another massive capex allocation of the group will be for subsidiary Energy Development Corporation (EDC) for various renewable energy projects – primarily on hydro and geothermal project developments.
Puno said EDC will sustain its capex allocation of P7 billion to P8 billion annually for this year and also for 2021, but there had been adjustments in project implementations because of the logistical constraints posed by the coronavirus pandemic.
“The Covid-19 situation challenges our ability to execute given various quarantine measures across our sites and so we have to adjust. We have a plan in place to recover and ramp up activities quickly once delivery of materials and mobilization of manpower can resume,” he stressed.
Other items in the company’s capital spending will be for the life extension of its existing 1,000-megawatt Santa Rita, 500MW San Lorenzo; 414MW San Gabriel and 97MW Avion plants.
“There will be life extension capital expenditure spending for Santa Rita and San Lorenzo plants in 2021; but this is not a large amount, this is just about US$2.5 million; and for Avion, capex cost is US$2.5 million in the 2021 timeframe,” Puno noted.
Beyond the life extension of the facilities, he emphasized that the allotted spending for the gas assets this 2020 had been set at US$20 million; and it will be little leaner at US$18.3 million next year.
“Their other capex, include shelter-in-place housing and plant improvements,” the company executive added.