Philippines First Gen Shortlists Three Firms for FSRU Supply

Manila-listed First Gen Corporation has shortlisted three companies to participate in a competitive selection process in respect of the chartering of a floating storage and regasification unit (FSRU) for its Batangas LNG terminal project, it said on July 16 in a stock exchange filing.

Three shortlisted companies are BW Gas, GasLog and Hoegh. The FSRU chartering represents the initial phase of the Batangas LNG terminal which was previously declared by the government as ‘energy project of national significance’, the company said.

Earlier this year, First Gen’s wholly-owned subsidiary, Fgen LNG, filed the application for a permit to construct, expand, rehabilitate and modify (PCERM) its existing jetty with the department of energy. A PCERM is required by the Philippine Downstream Natural Gas Regulation (PDNGR).

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 a 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.