First Gen building new $1-B LNG terminal

MANILA, Philippines - First Gen Corp. is eyeing to close the engineering, procurement and construction (EPC) tender and and partner selection process for its $1-billion liquefied natural gas (LNG) terminal next year to be able to push for full-swing construction of the facility in 2018, its top official said.

The company has set to find an EPC contractor in early 2017 and strike a partnership deal in by the first half of the same year, First Gen president and COO Giles Puno told reporters on the sidelines of the Clean Energy Summit.

 “We’re bidding out the EPC. We are releasing tender documents first thing in 2017,” he said. “Our partner selection [will be completed] hopefully by first half of next year.”

Puno said site preparations have already been started and construction is slated in 2018 once deals for a contractor and partner is sealed.

The company announced in late 2015 it is looking for partners for the proposed LNG terminal, offering up to  50 percent stake in the project, since capital cost may reach $1 billion.

Currently, First Gen has five potential contractors in its shortlist while it is in discussions with eight potential partners which are mostly Japanese and European firms.

Puno said the company could have multiple partners in undertaking the project but is taking its time in its assessment until it makes a final decision for its $1-billion LNG terminal by end-2017.

 “What we’ve been doing is spending time with them to see what the fit is, what the chemistry of the partnership will be. The nice thing about it is we still have time, we don’t have to conclude this today. We need to be able to do it so by the time we make the investment decision tail-end of next year, that we would have a partner by then,” he said.

The company official also said they are also open for government to come in since it has announced plans to construct a LNG terminal to ensure LNG supply especially after the depletion and consummation of contract for the Malampaya deepwater gas-to-power project by 2024.

While talks have yet to happen, Puno said the company and government can discuss what is the most feasible arrangement for the LNG terminal but stressed it could take a long time if the latter will start from scratch.

 “We could consider (a government stake in our project). It could be public private partnership (PPP) effectively,” he said. “For me there is a grand opportunity for this administration to make it their legacy investment, to develop a LNG terminal in this term.”

Similar to government’s goal, First Gen’s planned facility is aimed to augment the LNG supply with the depletion of Malampaya, which supplies power to natural gas power facilities with a total capacity of 2,700 megawatts (MW), namely the Santa Rita and San Lorenzo natural gas plants of the Lopez Group and the Ilijan plant under San Miguel Group.

Puno said the planned terminal will have a capacity to supply five million tons of natural gas, which is equivalent to 5,000 MW, which is more than enough to meet First Gen’s requirements for existing and future projects as well as other natural gas-fired power plants.