FIRST GEN Corp. is looking to expand the reach of its planned floating storage regasification unit (FSRU) for natural gas to the provinces, including those in the Visayas and Mindanao, a company official said on Wednesday.

“We want to make sure that we can walk before we run. We’ve been focusing on first of all, working on the base case. Now we’re very focused on the early introduction of LNG (liquefied natural gas) and in parallel, we’re looking at how we can already start to bring LNG, in a small scale, for the provinces,” Jonathan C. Russell, First Gen executive vice-president and chief commercial officer, told reporters on the sidelines of Powertrends 2019 at the SMX Convention Center in Pasay City.

He said the move includes construction of power plants, providing the means to deliver LNG in smaller scale vessels to the islands, and even road tanker deliveries within the country’s main island of Luzon where the First Gen Clean Energy Complex is located.

In May, First Gen broke ground on its planned LNG import terminal project in the same complex in Batangas City. It followed the signing in December 2018 of a joint development agreement with Tokyo Gas Co., Ltd., which is taking a 20% participating interest in the project.

On Monday, the Lopez-led company announced the selection of Japan’s JGC Corp. as the project’s engineering, procurement and construction (EPC) contractor. It said the immediate focus of the partners is to complete a detailed study on modifications that can be made to the group’s existing jetty that would allow the facility to receive large- and small-scale LNG vessels, and to continue to receive liquid fuel.

First Gen will then look to start building the modified jetty “as soon as possible.” The early completion of this work will allow bringing in an FSRU on an interim basis during the Duterte administration.

The FSRU or LNG storage ship has an onboard regasification plant capable of returning the liquefied fuel back into a gaseous state. The gas can then be supplied directly to some or all of the company’s existing power plants.

Mr. Russell placed the capacity of the FSRU “probably in the range of 170,000 cubic meters, that’s the standard.”

“The beauty of LNG is it’s modular so it can be scaled in different sizes. But in the islands the demand is a bit less,” he said, adding that the capacity of a power plant could range from 20 megawatts (MW) to 50 MW.

“But it really depends on what the demand is. There’s no point trying to force a particular plant on a particular location. All you need to do is identify what the need is, and then build something that is suitable for that particular location, which can then be scaled so you can always increase its capacity,” he said.

With the proposed FSRU, First Gen expects to receive LNG as early as 2021 or way ahead of the expiration in 2024 of the Malampaya contracts, the country’s only source of natural gas for the 3,200-MW power plants that run on that fuel.

“It will take a bit longer for the plants,” he said, comparing the completion to the 2021 entry of imported LNG. “It’s something we need to look at a bit further.”

Asked whether the reach could go as far as the Visayas and Mindanao, he said: “I believe so, yes. I think there’s a need throughout the Philippines, which currently doesn’t exist.”

“If you want to build power plants in the Visayas today, natural gas is not an option. But with small-scale LNG it now becomes an option that doesn’t exist before,” he said.

Mr. Russell said First Gen is currently negotiating for short-term LNG supply.

“We’re not ruling anybody out. We’re talking to all of the main LNG supply companies, both portfolio players, national oil companies and even traders. We’re just trying to find which of those entities can provide the supply which is sort of most fitting for the Philippines’ needs as a new buyer, especially maximizing the flexibility,” he said. — Victor V. Saulon

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