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First Gen pushes bid for Batangas LNG hub

Danessa Rivera (The Philippine Star) - December 22, 2018 - 12:00am

MANILA, Philippines — Lopez-led First Gen Corp. has made a formal bid to push its liquefied natural gas (LNG) terminal in Batangas as the country’s LNG hub.

In a disclosure yesterday, First Gen said its wholly-owned subsidiary FGEN LNG Corp. submitted its application to the Department of Energy (DOE) for a notice to proceed (NTP) to construct the FGEN Batangas LNG terminal project.

“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,” the company said.

First Gen’s onshore storage and regasification terminal will have a capacity to supply a minimum five million tons of natural gas equivalent to 5,000 MW and is expected to cost at least $1 billion.

Earlier this month, FGEN LNG signed a joint development agreement (JDA) with Tokyo Gas Co. Ltd., Japan’s largest natural gas utility.

The JDA is a preliminary agreement between the parties to jointly pursue development of the LNG terminal project located in Batangas.

Under the deal, Tokyo Gas will take a 20 percent participating interest in the FGEN LNG project and provide support in development work to achieve a final investment decision (FID).

Once an FID is reached, the parties will enter into a definitive agreement to proceed with the construction of the FGEN Batangas LNG terminal project.

Tokyo Gas is a leading LNG player with 130 years of experience building and more than 50 years of experience in the LNG business. It is one of the largest purchasers of LNG in the world with an annual volume of 14 mtpa.

First Gen, on the other hand,  is one of the biggest independent power producers in the country and the leading gas power generation company in the Philippines with approximately 2,000 megawatts (MW) in operating gas assets.

These assets are composed of four gas-fired power plants – 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, all of which currently operate on Malampaya gas supply.

The DOE is accepting proposals from companies interested to build the LNG terminal.

Apart from First Gen, the partnership of businessman Dennis Uy’s Phoenix Petroleum Philippines Inc. and China National Offshore Oil Corp. (CNOOC) formally submitted a proposal to the government to build the country’s LNG terminal.

The DOE hopes to start constructing the country’s LNG hub by mid-2019 to safeguard against the anticipated contract expiration of the Malampaya gas facility by 2024.

The LNG facility is envisioned to become an LNG hub for Asia, complementing those in Japan and Singapore.

DEPARTMENT OF ENERGY FIRST GEN CORP.
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