As the Malampaya gas field is inching closer to its run-out phase and the country transitions into renewables, President Ferdinand Marcos Jr. has cited the critical role that the liquefied natural (LNG) investment deal of Lopez-led First Gen Corporation and Tokyo Gas Co. Ltd., will bring in plugging capacity gap when the main power grid of Luzon suffers from continuing tight supply predicaments.
Marcos met with Tokyo Gas officials led by its Chief Executive Officer Takashi Uchida and First Gen Chairman and CEO Federico “Piki” Lopez
in his recently concluded state visit to Japan. It was in that formal encounter the President stated the paramount contribution of the LNG venture in the continuing diversification of the country’s energy mix.
“We are encouraged that in the view of Tokyo Gas, it is worth the investment and we feel that we are going down the right path for our country's energy mix,” the President said.
He added that the equity take of Tokyo Gas in the LNG project is regarded as a “vote of confidence that you have shown by your investment in the future of the Philippine economy, the future especially of our energy supply from liquefied natural gas.”
Tokyo Gas has 20 percent stake in the LNG facility development being spearheaded by First Gen at its existing energy complex in Batangas. The initial phase of the project will be floating storage and regasification unit (FSRU); and the longer-term plan is to eventually set up an onshore terminal.
Gas, in particular, is deemed as the best technology coupling to the massive scale renewable energy (RE) investments that had been cast for the country – and that’s primarily due to the very flexible state of its generation, that in turn, can prop the variability of wind and solar installations.
In the energy transition agenda being advanced by the current administration, Marcos indicated that having a ‘bridge fuel’ like LNG, “is the most critical part of our plans for the future.”
While renewables, like solar farms, are easy to install and could be up and running in less than a year, the on-and-off generation of such facility will continue to be a conundrum in the entire chain of the power system; hence, technology pairing has to be pursued – and gas is seen most viable while energy storage systems have yet to reach pace of maturity as well as price points that will be highly affordable to consumers.
A status report of the Department of Energy (DOE) has shown that the commissioning phase of the First Gen-Tokyo Gas LNG facility will be around April this year; while commercial operation is anticipated to kick off by June.
According to Atty Rino Abad, director of the DOE’s Oil Industry Management Bureau (OIMB), First Gen’s partnership with Tokyo Gas is considered to be “very strategic” because that sets certainty that the Lopez-led company will have guaranteed source of its gas supply.
He, nevertheless, indicated that the remaining pressing concern will be the price of the LNG that will be shipped into the country, given the lingering crisis that has been afflicting the supply-demand dynamics of this commodity as precipitated by the Russia-Ukraine war.