First Gen submits bid to build liquefied natural gas terminal

Lopez-led First Gen Corp. has formally signified its intent to build a liquefied natural gas (LNG) terminal in the country.

In a disclosure to the Philippine Stock Exhange, First Gen said its wholly-owned unit FGEN LNG Corp. has submitted an application  to the Department of Energy for a notice to proceed "for the construction of the FGEN Batangas LNG Terminal Project to be located in the First Gen Clean Energy Complex in Batangas City."

"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.

The company's application came after First Gen entered into a joint development agreement (JDA) with  Tokyo Gas Co. Ltd. for the LNG terminal project.

"The JDA is a preliminary agreement between the parties to jointly pursue the development of the FGEN Batangas LNG Terminal Project," it said.

Under the agreement, 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).

"Upon reaching FID under the JDA, the parties will enter into a Definitive Agreement to proceed with the construction of the FGEN Batangas LNG Terminal Project."

First Gen's move is the second bid for the DOE's LNG hub initiative. Its application came two months after Tanglawan Philippines LNG Inc. - the joint venture of China National Offshore Oil Corp. (CNOOC) and Phoenix Petroleum Philippines Inc. - applied to construct an integrated LNG facility in Batangas.

The DOE is pushing for an LNG terminal facility to avoid shooting up consumer electricity rates due to the expected depletion of resources at the Malampaya natural gas facility.

Malampaya supplies the LNG requirements of three power plants with a combined generating capacity of 2,700 megawatts in Luzon—enough to meet up to 30 percent  of Luzon’s electricity needs, or about 20 percent of the country’s total electricity requirements. — MDM, GMA News