First Gen unit seeks more time to build LNG terminal

FIRST GEN Corp. said on Thursday that its unit had requested the Energy department to extend the validity of its permit to build its interim offshore terminal for imported liquefied natural gas (LNG).

In a disclosure, the Lopez-led energy firm said FGEN LNG Corp. made the request for an extension to March 23, 2023 from Sept. 23, 2022, the previous validity of its permit to construct, expand, rehabilitate and modify the proposed facility.

“The request is due to projected delay in the completion of the Project caused by events and circumstances not within the reasonable control of FGEN LNG,” First Gen said, without disclosing the specific cause of delay.

The company added FGEN LNG and the provider of its floating storage regasification unit BW FSRU IV Pte. Ltd. had agreed to move delivery of the vessel to the second or early third quarter of next year.

The delivery was previously set for the first quarter of 2023.

FGEN LNG is developing the project “to accelerate its ability to introduce LNG to the Philippines, 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 First Gen unit said the LNG project would play a critical role in ensuring the energy security of the Luzon grid and the Philippines, “particularly as the indigenous Malampaya natural gas resource is expected to decline in the next few years.”

Last month, a company official said First Gen had allocated $550 million, or around P29 billion, for capital spending this year, with its renewable energy subsidiary cornering nearly half of the budget followed by its LNG terminal project.

The company also said last month that the LNG terminal had been allotted a $135-million capex this year as it completes construction. The facility was expected to be ready to commercially operate in the fourth quarter of 2022.

First Gen, the country’s leading gas power generation company, has around 2,000 megawatts (MW) in operating gas facilities comprising four gas-fired power plants, namely: the 1,000-MW Santa Rita power plant, the 500-MW San Lorenzo, the 414-MW San Gabriel, and the 97-MW Avion power plant.

First Gen earlier said that its LNG project could also potentially supply natural gas to the 1,200 MW Ilijan power plant.

The country’s existing gas-fired power plants are currently fueled by the Malampaya gas-to-power project off Palawan’s shore.

On Thursday, shares in the company rose by 1.45% or 24 centavos to close at P16.80 apiece. — Victor V. Saulon