First Gen Corp. and Prime Infrastructure Capital Inc. announced Wednesday an agreement for a 15-year lease of the former’s liquefied natural gas storage and regasification terminal at the First Gen Clean Energy Complex in Batangas City.
First Gen said in a disclosure to the stock exchange its wholly-owned subsidiary FGEN LNG Corp. and Gas Aggregator Philippines Inc., a wholly-owned unit of Prime Infra, signed the terminal lease agreement (TLA).
First Gen said earlier the gas aggregation framework was meant to “make it possible to blend currently declining volumes of indigenous Malampaya gas with imported LNG.”
It said the framework would provide least-cost solution for consumers, enhanced energy security and competitive market for power generation.
It would also complement ongoing commercial development of “new indigenous natural gas fields.”
First Gen said the effectivity of the TLA is conditioned upon the satisfaction of a number of conditions precedent.
“The Philippine government has determined natural gas as a complementary transition fuel to support DOE’s 2020-2040 Philippine Energy Plan to ensure energy security, while enhancing the renewable energy capacity of the country,” the company said.
It said the lease of the FGEN LNG Terminal will form part of Prime Infra’s proposed gas aggregation strategy that will enable it to deploy a tolling business model, which will in turn allow it to leverage on its existing Malampaya project facilities and its expertise in the natural gas market.
President Ferdinand Marcos Jr. approved the renewal agreement for Malampaya Service Contract No. 38, which will allow the continued production of the Malampaya gas field and ensure that the remaining gas reserves are further explored and utilized until Feb. 22, 2039.
First Gen, led by its chairman and chief executive Federico Lopez, is one of the biggest independent power producers in the country and the leading gas power generation company with about 2,000 megawatts (MW) in operating gas assets composed of four gas-fired power plants.
These are the 1,000-megawatt Santa Rita power plant, the 500-MW San Lorenzo power plant, the 414-MW San Gabriel power plant and the 97-MW Avion power plant.
Prime Infra is a leading and fast-growing sustainability-driven infrastructure arm of Filipino businessman Enrique Razon Jr. I.