First Gen’s Batangas LNG terminal project cleared by DoE

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By Victor V. Saulon
Sub-editor

ENERGY SECRETARY Alfonso G. Cusi on Thursday said he signed a notice to proceed (NTP) for the proposal of First Gen Corp. to build a liquefied natural gas (LNG) import terminal within its power plant complex in Batangas province.

“This morning… I signed it (notice to proceed),” he told reporters in an informal gathering at the Department of Energy (DoE) head office in Taguig City.

First Gen has a joint development agreement (JDA) with Tokyo Gas Co., Ltd. to develop an LNG facility through its unit FGEN LNG Corp. It follows pronouncements from the government that LNG is vital to ensure the country’s energy security once the Malampaya gas field, which fuels the company’s plants, is depleted.

On Dec. 21, 2018, the partners said they had sought clearance from the DoE to proceed with the construction of the facility.




Mr. Cusi said Tokyo Gas along with the Japanese government had been watching the development and pursuing the project in economic and ministerial meetings with Philippine representatives.

“That is always part of the subject matter,” he said, adding that during his official trip to Japan last month the topic was again raised.

On Wednesday night, First Gen President Francis Giles B. Puno said the partners are to decide on three components of their LNG proposal within the year, including the total project cost and its capacity.

“The next phase is the selection of the contractor. The main reason for selecting the contractor is to firm up the cost of the project. That’s the things that we need to firm up. Hopefully we move towards financing close,” he told reporters during an awards ceremony in Makati City.

He said the NTP from the DoE will allow the project to move forward.

Under the partnership, 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 has said.

Mr. Puno, who is also First Gen’s chief operating officer, said his group is still looking for possible partners to provide additional equity.

“We’re also looking at other partners that are available,” he said, adding that since the announcement of the Tokyo Gas partnership, the Lopez group had received increased interest from foreign entities.

The notice to proceed to the First Gen-Tokyo Gas LNG project pits the partnership with two other entities with a similar proposal — Phoenix Petroleum Philippines, Inc and CNOOC Gas and Power Group Co. Ltd.; and the local unit of Australian firm Energy World Corp. Ltd. (EWC). Both groups have been issued a notice to proceed.

Philippine National Oil Co. (PNOC) President and Chief Executive Officer Reuben S. Lista said the state-firm’s participation in the Phoenix Petroleum-led project could include discussions on its equity contribution in the import facility and related projects.

EWC has yet to respond to a request for an update on its project.

On Thursday, First Gen rose 3.21% to close at P22.50.