First Gen to kick off construction of US$1.3-B LNG terminal project
The proposed floating storage and regasification unit (FSRU) project of Lopez-owned First Gen Corporation will finally move to construction phase and had been advancing according to target, so it can bring liquefied natural gas (LNG) into the country by 2022.
That as the company’s corporate vehicle FGEN LNG Corporation already filed its application for a permit to construct, expand, rehabilitate and modify (PCERM) with the Department of Energy, the agency in-charge of approving LNG projects.
As estimated, the FSRU project will cost roughly US$200 million to US$400 million depending on the final design and capacity – and shall be the initial phase of the company’s LNG infrastructure development. By far, project blueprints set forth that developments would be capped by an onshore LNG import terminal that will command aggregate investment of US$1.0 billion to US$1.3 billion.
“FGEN LNG’s PCERM application is for the construction of an interim offshore LNG terminal within the First Gen Clean Energy Complex in Batangas City,” the company has stated in its disclosure to the Philippine Stock Exchange.
The coverage of the construction works, according to the company, shall include: Modification of First Gen’s existing liquid fuel jetty “that will enable it to become multiple use, hence, allowing the receipt of large and small-scale LNG vessels as well as liquid fuel vessels.
The next component of the project will be the adjunct onshore gas receiving facility, the company has specified. FGEN LNG Corporation is majority owned by Lopez-owned First Gen at 80 percent equity; while 20% is held by Tokyo Gas Co. Ltd.
“Once completed, the project will allow First Gen to be able to bring in FSRU on an interim basis and thus accelerate FGEN LNG’s ability to introduce LNG to the Philippines,” the Lopez firm stressed. The company has been in discussion with LNG suppliers since last year.
Of all the three projects that had previously been granted with notice-to-proceed (NTP) by the DOE, it is just the FGEN LNG venture that has advanced to construction stage so far – with one already dropping out from the roll; while the other has yet to announce plans on construction.
First Gen emphasized “if the PCERM is granted by the DOE, it will be able to commence construction of the project as early as May of this year, in order to be able to receive LNG as early as third quarter of 2022.”
The entry of imported LNG into the country by 2022 is seen crucial, given projections of production decline at the Malampaya field and the expiration of the gas sale and purchase agreement (GSPA) for the 1,200-megawatt Ilijan gas-fired power facility.