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First Gen unit seeks clearance to build LNG terminal

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FIRST Gen Corp. said its subsidiary sought clearance from the Department of Energy (DoE) to proceed with the construction of the group’s liquefied natural gas (LNG) import terminal project.

In a disclosure to the stock exchange, First Gen said its unit FGEN LNG Corp. submitted on Friday an application to the department for a “notice to proceed” as defined in and required by the agency’s Philippine Downstream Natural Gas Regulation.

“The application is for the construction of the FGEN Batangas LNG Terminal Project to be located in the First Gen Clean Energy Complex in Batangas City,” the listed company said.

First Gen, the country’s leading gas power generation company, has around 2,000 megawatts (MW) in operating gas facilities: 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. They run on gas supplied by the Malampaya gas-to-power project in offshore Palawan.

“The FGEN Batangas LNG Terminal Project is intended to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN LNG affiliates,” First Gen said.

The company’s application to proceed with the project comes after it announced on Dec. 5 that it signed a joint development agreement (JDA) with Tokyo Gas Co., Ltd. to pursue the joint development of an LNG terminal.




The agreement comes after recent pronouncements from the government describing LNG as vital to ensuring the country’s energy security once the Malampaya gas field is depleted.

Tokyo Gas will take a 20% participating interest in the LNG project and provide support in development work to achieve a final investment decision. Upon reaching that decision under the JDA, the parties will enter into a definitive agreement to proceed with the construction of the project, First Gen said.

In an earlier interview, First Gen Executive Vice-President Jonathan C. Russel said the project could potentially supply the company’s own facilities as well as the 1,200 MW Ilijan power plant.

He also said the company is looking at a power plant expansion by another 1,000 MW, thus a post-Malampaya gas importation could require an initial supply of 3 to 5 million tons per annum. He said the investment cost of the project is estimated at between $700 million and $1 billion.

On Friday, First Gen shares rose 2.97% to P9.02. — Victor V. Saulon

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