Philippines Okays First Gen LNG Import Terminal

Manila-listed First Gen on September 25 announced it has got Philippines government approval to build an LNG terminal in Batangas.

Fgen LNG, a unit of First Gen, received a permit from department of energy (DOE) on September 23 to construct, expand, rehabilitate and modify (PCERM) for the offshore LNG terminal located in the First Gen Clean Energy Complex. A PCERM is required by the Philippine Downstream Natural Gas Regulation.

The project consists of construction works necessary to modify the existing jetty that will enable it to become a multi-purpose jetty; and build an adjunct onshore gas receiving facility.

“Once Fgen LNG's preparations for the commencement of construction of the project are complete, including the design and implementation of enhanced work and safety protocols and procedures required to minimise the impact of Covid-19 on construction personnel and the local community, the construction phase of the Project may begin by the end of Q3 or early Q4 2020,” First Gen said.

Fgen LNG is preparing to issue a binding invitation to tender for a floating storage and regasification unit (FSRU) upon completion of its ongoing non-binding process. BW Gas, GasLog LNG Services, and Hoegh LNG, have expressed interest in providing the FSRU, the company said.

“The project will allow Fgen LNG to accelerate its ability to introduce LNG to the Philippines as early as Q3 2022, to serve the natural gas requirements of existing and future gas-fired power plants of third parties and Fgen LNG affiliates,” First Gen said.

In December 2018, Japanese utility, Tokyo Gas, signed an agreement with First Gen to develop an LNG receiving terminal in the country. Tokyo Gas has a 20% stake in Fgen LNG. In September last year, First Gen picked Japan’s JGC Corporation for the engineering, procurement and construction (EPC) work for the project.

The company stated that the project, and the early entry of LNG, will play a critical role in ensuring the energy security of the Luzon grid and the Philippines. The offshore Malampaya gas field is declining and gas supplies for the country’s power plants are looking ever less reliable.

First Gen has about 2 GW generating capacity from four operating gas assets – the 1-GW Santa Rita plant, the 500-MW San Lorenzo plant, the 414-MW San Gabriel plant and the 97-MW Avion plant – all of which depend on Malampaya's gas, whose gas sales contract expires in 2024. They are all at Batangas City.

Also needing gas supply is the 1.2-GW Ilijan gas-fired power plant, operated by Korea Electric Power Corporation but due to be turned over to Philippine conglomerate San Miguel Corporation in July 2022. The facility’s gas sales and purchase agreement is set to expire early that year.