The Department of Energy (DOE) has approved the construction timeline applied for by FGEN LNG Corporation, a joint venture of Lopez-led First Gen Corporation and Tokyo Gas Co. Ltd., for the US$300 million floating storage regasification unit (FSRU) project so it can bring liquefied natural gas (LNG) into the country starting 2022.
The go-signal had been provided through a permit to construct, expand, rehabilitate and modify (PCERM) that was formally issued on September 23, 2020 by the energy department.
In a statement to the media, First Gen said “the project will allow FGEN LNG to accelerate its ability to introduce LNG to the Philippines as early as third quarter of 2022, to serve the natural gas requirements of existing and future gas-fired power plants of third parties and LNG facilities.”
First Gen itself has 2,011 megawatts of gas-fed power generating assets; and the proposed LNG import terminal will partly cater to its requirements; as well as the facilities of other power producers.
FGEN LNG indicated its next step will be “to issue a binding invitation to tender for FSRU upon completion of its ongoing non-binding process.”
In its roll of prospective bidders are classified “experienced FSRU providers,” namely: BW Gas Limited, GasLog LNG Services Ltd., and Hoegh LNG Asia Pte. Ltd.
First Gen said the three foreign firms “have expressed interest in providing FSRU that will provide LNG storage and regasification services to the project once constructed.”
The company emphasized it already completed a detailed study on the proposed modification of its existing jetty at its Clean Energy Complex in Batangas City; which will then equip it to receive large- and small-scale LNG vessels, including FSRUs.
Jonathan C. Russell, executive vice president and chief commercial officer of First Gen, cited the guidance that the DOE had extended to them as project proponent, primarily in the evaluation process “given the difficult circumstances created by the Covid-19 pandemic.”
Company executives stipulated that the project will command an investment of US$300 million – and US$60 million had already been spent; while the remainder will form part of their scheduled capital outlay in the next 2-3 years.
The developer-firm said “the entry of LNG will encourage new power plant developments as well as industrial and transport industries, to consider it as a replacement to more costly and polluting fuels.”
First Gen President and COO Francis Giles B. Puno further highlighted that the LNG import facility will “enable the entry of much-needed renewable energy projects,” especially with the scheduled rollout of the Renewable Portfolio Standard (RPS) policy of the government starting next year.
On a wider scale, the Lopez firm is also looking at prospects of deploying new and large-scale gas plants throughout the many islands in the country.
“The LNG project can serve the needs of existing and future gas-fired power plants, for both First Gen and third parties. This allows us to continue providing clean, far less polluting and competitively priced energy,” Puno stressed.