First Gen Corp. and Prime Infrastructure Capital, Inc. signed a 15-year lease agreement for an LNG storage and regasification terminal in Batangas City.
The Batangas terminal is owned by FGEN LNG Corp., a wholly owned subsidiary of First Gen.
Earlier this year, First Gen and Prime Infra announced the signing of a Memorandum of Understanding for the proposed lease of the FGEN LNG Terminal.
The lease of the FGEN LNG Terminal forms part of Prime Infra's proposed gas aggregation strategy, leveraging its expertise in the natural gas market and the Malampaya project facilities.
The government has identified natural gas as a complementary transitional fuel to enhance the country's renewable energy capacity and ensure energy security.
First Gen is one of the biggest independent power producers in the Philippines, with approximately 2,000 MW in operating gas assets across four gas-fired power plants.
Prime Infra is a leading sustainability-driven infrastructure arm committed to providing enduring, environmentally-resilient projects in water, sustainable energy, waste management, and sustainable fuels.
FGen, Prime Infra ink 15-year lease for LNG terminal
At a glance
First Gen Corp. and Prime Infrastructure Capital, Inc. (Prime Infra) have entered into a lease agreement for the liquefied natural gas (LNG) storage and regasification terminal located in Batangas City.
In a disclosure to the Philippine Stock Exchange on Wednesday, Dec. 27, First Gen said that Prime Infra's subsidiary, Gas Aggregator Philippines, Inc., will be leasing its liquefied natural gas storage and regasification terminal in Batangas City for a period of 15 years.
The Batangas terminal is owned by FGEN LNG Corp., a wholly owned unit of First Gen.
Earlier this year, First Gen and Prime Infra signed a memorandum of understanding for the potential lease of the FGEN LNG terminal.
“The effectivity of the TLA is condoned upon the satisfaction of a number of conditions precedent,” First Gen said.
The leasing of the FGEN LNG terminal will be integrated into Prime Infra's planned gas aggregation strategy, enabling the implementation of a tolling business model.
This, in turn, will enable the Prime Infra to capitalize on its current Malampaya project facilities and its proficiency in the natural gas market.
To recall, President Marcos approved the renewal agreement for Malampaya Service Contract No. 38, ensuring the continued production of the gas field and the exploration and utilization of the remaining gas reserves until Feb. 22, 2039.
The government has identified natural gas as a supplementary transitional fuel to bolster the Department of Energy's 2020-2040 Philippine Energy Plan, aiming to reinforce energy security while expanding the country's renewable energy capacity.
First Gen is one of the largest independent power producers in the country and the leading gas power generation entity in the Philippines, operating approximately 2,000 mega watts (MW) in gas assets across four gas-fired power plants.
These include the 1,000 MW Santa Rita Power Plant, the 500 MW San Lorenzo Power Plant, the 414 MW San Gabriel Power Plant, and the 97 MW Avion Power Plant.
Prime Infra, meanwhile, a leading and rapidly expanding sustainability-focused infrastructure division of tycoon Enrique K. Razon Jr.
The company is committed to delivering economically sustainable, environmentally resilient, and socially impactful projects that address pressing priorities in three core sectors—water, sustainable energy, waste management, and sustainable fuels.