First Gen Corp. is initially spending $300 million for a floating, storage and regasification unit in Batangas province that will pave the way for the importation of liquefied natural gas before 2024.
First Gen president Francis Giles Puno said of the $1.3-billion budget for the whole LNG project, roughly $300 million would be spent on FSRU”•a vessel designed for transiting and transferring LNG across the sea.
“But it doesn’t include lease payment for floating regas terminal. We should be clear to our stakeholders what the plan is by first quarter next year,” Puno said at the sidelines of the Arangkada Forum recently.
First Gen aims to bring LNG to the country before 2024 when the Malampaya gas field in northwest Palawan will start to be depleted and the Malampaya consortium contract ends.
Puno said the company was working with JGC Corp. of Japan on the engineering, procurement and construction of the LNG terminal project in Batangas.
“We are working with JGC in completing the requirement of potentially shifting to FSRU in the interim. Main reason for that is to enable us to deliver gas earlier. That is advantageous to us is because the price of LNG today are quite attractive and even cheaper than Malampaya,” Puno said.
First Gen currently utilizes natural gas from the Malampaya gas project to power its 420-megawatt San Gabriel, 97-MW Avion, 1,000-MW Santa Rita and 500-MW San Lorenzo gas-fired power plants.
“We should take advantage of the market opportunity to deliver very cost-competitive gas from the market,” Puno said.
“If we can bring in gas lower than Malampaya, it is really good for consumers. That’s what we are investigating today, if that is something that we can do for the consumers. Bring in LNG earlier and show to the market that gas is really competitive to other fuels including coal,” he said.
Puno said talks were ongoing with FSRU providers to bring LNG earlier than 2024.
“The objective really is to bring in LNG earlier than 2024. Malampaya also goes to some outages. Sometimes the gas that they bring in is already not sufficient for our requirements to support all our natgas plants on a 24-by-7 basis,” he said.
Puno said the company would modify its jetty port in Batangas for the entry of the FSRU. “The moment we shift to onshore terminal, that jetty will still be utilized,” he said.
First Gen executive vice president and chief commercial officer Jonathan Russell earlier said the Malampaya gas field in northwest Palawan was running at maximum capacity.
“In order to develop new additional capacity we can’t rely on Malampaya anymore, so we need to introduce LNG,” Russell said.
The LNG project is being developed by First Gen through wholly-owned subsidiary FGEN LNG Corp. FGEN LNG received a notice to proceed from the Energy Department in March. FGEN LNG asked the DOE to extend its NTP by another six months.
First Gen signed a joint development agreement with Tokyo Gas Co. Ltd. In December 2018 to jointly pursue the project, with Tokyo Gas taking a 20-percent participating interest.