First Gen LNG project declared of national significance

MANILA, Philippines — The liquefied natural gas (LNG) terminal of Lopez-led First Gen Corp. was declared an energy project of national significance (EPNS) by the Energy Investment Coordination Council (EICC) of the Department of Energy (DOE).

First Gen said its subsidiary FGEN LNG Corp. was informed by the EICC that its application was approved.

As such, the DOE as lead implementing agency of Executive Order (EO) 30 issued a corresponding certificate of EPNS in favor of the project.

Signed by President Duterte in June 2017, EO 30 provides that government agencies concerned with energy projects should presume other agencies were able to act upon and issue their respective permits within a 30-day period.

If not acted upon five days after the lapse of 30 days, these projects are deemed approved.

EPNS are significant energy projects for power generation, transmission, and/or ancillary services including those required to maintain grid stability and security, and which are in consonance with the policy thrusts and specific goals of the DOE’s Philippine Energy Plan (PEP). 

First Gen said the application for declaration was submitted on the basis that the project would require the development of significant infrastructure and capital investment involving complex technical processes and engineering designs that will result in a substantial positive impact on the environment.

The project will also provide a consequential economic impact that will contribute to the country’s economic development and healthy balance of payments, it said.

It is consistent with both the DOE’s nine point energy agenda and PEP 2017-2040 as it promotes LNG importation as an option to supplement and replace Malampaya gas, ensuring a sustainable supply to develop LNG for the future in anticipation of the depletion of the Malampaya resource. 

“We would like to sincerely thank the Department of Energy for approving our application for the FGEN Batangas LNG terminal project as an energy project of national significance. We believe that this project is crucial to ensure the continued operations of the 3.2 GW existing natural gas-fired plants given the expected reduction in gas supply from the Malampaya field up to the expiration of the contracts by 2024,” First Gen chief financial officer Jonathan Russell said.

“First Gen will continue to work hard to ensure that this project will also be available to allow the development of new gas-fired capacity, with a lower carbon footprint that will support introduction of more intermittent renewables for the Philippines,” he said.

The project will be built in the First Gen Clean Energy Complex (FGCEC) in Barangays Sta. Clara, Sta. Rita Aplaya and Bolbok, Batangas City under the management and ownership of FGEN LNG. 

FGEN LNG has completed significant pre-development work to make the project site “construction ready.” 

In March 2019, FGEN LNG received the formal approval of its application for a notice to proceed (NTP) from the DOE, as defined in and required by the Philippine Downstream Natural Gas Regulation. 

In December 2018, First Gen signed a joint development agreement (JDA) with Tokyo Gas Co. Ltd.

The JDA is a preliminary agreement between the parties to jointly pursue development of FGEN LNG Corp.’s project with Tokyo Gas taking a 20 percent participating interest. 

FGEN LNG believes the project will play a critical role in ensuring the energy security of the Philippines and the Luzon grid, particularly when the indigenous Malampaya gas resource no longer produces sufficient fuel for the country’s existing gas-fired power plants, and certainly not for additional gas-fired power plants.