DOE flagged on ‘error’ in Vires Energy’s LNG application

Published April 28, 2021, 10:17 AM

by Myrna M. Velasco

The Department of Energy (DOE) has been flagged on a major error in the targeted floating storage regasification unit (FSRU) deployment of Vires Energy Corporation, the newest company to be given notice-to-proceed (NTP) by the agency on its liquefied natural gas (LNG) import facility project.

In a letter to Energy Secretary Alfonso G. Cusi, BW Gas Limited Vice President – LNG Commercial for Asia and Middle East Akbar Sha, stated that the ‘BW Paris’ FSRU that Vires Energy intends to use in its LNG project is an “inaccurate” information, because that facility has already been committed to the project being advanced by FGEN LNG Corp of the Lopez-led First Gen Corporation.

First Gen similarly made disclosure to the Philippine Stock Exchange (PSE) on the matter on Wednesday (April 28), reiterating that the “BW Paris” FSRU has already been committed to its LNG project in Batangas.

BW Gas primarily cited the DOE’s statement in Vires Energy’s license application for LNG import facility that it will be using “BW Paris with an LNG storage capacity of 162,400 m3,” but the Norwegian firm claimed “this cannot be correct as the BW Paris has been contracted to FGEN LNG by its owner, BW FSRU IV Pte. Ltd.”

BW Gas further apprised the energy department that “on April 3, 2021, FGEN LNG Corporation and BW FSRU IV Pte Ltd entered into a 5-year time charter party (TCP) for the charter of the BW Paris as an FSRU in respect of FGEN LNG’s interim offshore LNG terminal project.”

The company emphasized that BW Paris has LNG storage capacity of 162,400 m3 and a nominal and peak gas send out capacity of 500 million standard cubic feet per day (mmscfd) and 750 mmscfd, respectively.

“BW Gas Limited and BW FSRU IV Pte Ltd. are committed to providing the BW Paris, solely and exclusively, to the FGEN LNG project and we look forward to working closely with FGEN LNG to play a catalytic role in the growth of the Philippine gas industry,” Sha stressed.

Aside from providing storage and regasification services, the BW Gas executive stipulated that “the BW Paris chartered by FGEN LNG is capable of providing ancillary services such as the reloading of LNG into trucks and small-scale LNG vessels, which can then distribute LNG to nearby industrial areas as well as the rest of the Philippine archipelago.”

He specified that “the TCP is the culmination of a tender process that FGEN LNG initiated, with respect to BW Gas Limited, with the issuance of binding invitation to tender to BW Gas Limited on October 20, 2020.”

The Norwegian firm added that as early as November 3, 2020, BW Gas Limited already issued a commitment undertaking to FGEN LNG, in which the owner of BW Paris, “shall ensure that the BW Paris was not contracted, either conditionally or unconditionally, to any person(s) other than FGEN LNG in a manner that would prevent the BW Paris from being available to be chartered by FGEN LNG to meet the requirements and timeframe of the project.”

Sha indicated that it was just prior to the issuance of commitment undertaking to FGEN LNG that BW Gas “had received preliminary inquiries in respect of the BW Paris from various companies, including some Philippine companies, including parties claiming to represent Vires Energy Corporation,” and he further qualified that those inquiries “never went beyond the exploratory.”

The interim LNG import facility of First Gen is set for commercial operation by third quarter of next year; while the proposed facility of Vires Energy is targeted on stream by year 2023. (MMV)