Lopez-led First Gen Corporation is scheduling a tender process for the procurement of its liquefied natural gas (LNG) on a spot contract basis that will be utilized as commissioning fuel for its LNG import facility in Batangas.

According to First Gen Chief Commercial Officer Jonathan C. Russell, they are targeting to procure 160,000 cubic meters or one full cargo to be supplied within one to three months for its gas-fired power facility, which will be linked to its floating storage regasification unit (FSRU) LNG facility.

“We’re about to issue a tender within the next two weeks for a cargo of LNG – spot cargo; that’s the cargo that will then be used for the wet commissioning; and then supply to the power plants for generation of electricity using LNG,” he said.

Spot tendering warrants LNG buying on short-term contracts and this would also be scheduled for immediate delivery. This is often seen offering more flexibility because it will allow purchase of LNG on cargoes or ad hoc basis.

On the LNG facility’s wet commissioning, it was explained that such entails operation of equipment for the first time post-construction phase for purposes of testing the performance of that particular equipment in the whole chain of the LNG facility.

Prior to the wet commissioning, there is also a "dry commissioning" to be carried out on the LNG import terminal. This means, the equipment has already been manufactured, undergone trial fit, quality control testing, disassembled, and packed ready for transport.

Russell emphasized “construction has been completed in March, we achieved practical completion” and the required permit for the facility’s targeted operation has already been filed with the Department of Energy.

“We’re now at dry commissioning phase, so that would continue up until around September when the FSRU will be commissioned. And in September, we will do the wet commissioning phase which involves the storage and regasification of LNG; and then we’ll use that in our power plants to commission the LNG (facility) for the first time. So, it is a natural progression and we’re on track,” he stressed.

Beyond the required LNG fuel for the commissioning phase, the First Gen executive conveyed that they are also “in parallel discussions for medium-to-long term supply, these are ongoing with a number of different entities.”

He qualified that “the medium-to-longer term contracts will follow; and we anticipate that those will start 2024 at the earliest.”

The company’s LNG supply sourcing, he said, will have to be strategically synergized with additional volume that could still be supplied by the Malampaya gas field to the First Gen plants.

“We need to operate the plant in conjunction with Malampaya, so that depends a little bit on how Malampaya performs, but it (LNG cargo) can last from one to three months of operation. After that, there could be another tender or we will commence a medium-term contract,” Russell noted.