By Myrna M. Velasco
Lopez-owned First Gen Corporation and partner Tokyo Gas Co. Ltd. sealed a joint development agreement (JDA) for the construction of liquefied natural gas (LNG) import terminal proximate to the former’s power plants’ site in Batangas.
In a disclosure to the Philippine Stock Exchange, First Gen noted that “Tokyo Gas will take a 20% participating interest in the FGen LNG project and provide support in development work to achieve a final investment decision.”
FGen LNG which is the corporate vehicle for the planned LNG terminal is a subsidiary of the publicly listed Lopez firm.
The Japanese firm separately stipulated in a press statement that “this is the first energy infrastructure development activity that Tokyo Gas participates in the Philippines.”
First Gen previously told media that it will be spending US$1.0 billion for LNG import facility that will have capacity of 5.0 million tons per annum. In its latest announcement, however, it has not qualified the investment scale as well as the capacity of the LNG terminal.
As noted by First Gen President Francis Giles B. Puno, the two companies “intend to cooperate with all relevant stakeholders who share the same vision to participate in making LNG viable for the Philippines.”
The setting up of LNG terminal is very relevant for First Gen because it owns fleet of gas plants that will be needing gas fuel – including its 1,000-megawatt Santa Rita, 500MW San Lorenzo, 414MW San Gabriel and 97MW Avion plants.
When asked on this development, Energy Secretary Alfonso G. Cusi said “I won’t take that against First Gen…that is good for their own use.”
Nevertheless, he qualified that the only commercial LNG terminal terminal that can sell to other power plants or end-users shall be the one that shall be selected by the Department of Energy – in keeping with the Philippine Natural Gas Regulation framework.
On the Tokyo Gas-First Gen joint venture, Puno enthused that they are excited “to partner with Tokyo Gas, a world class natural gas and LNG company with vast experience in the development, financing, construction and operations of LNG storage and regasification facilities.”
He added that “First Gen and Tokyo Gas share the common belief that the country needs clean natural gas to produce power which is not only cost-competitive, but given its flexible operations, is the perfect complement to a growing renewable energy industry.”
Gas is an ideal mid-merit capacity that could then set some flexibility in the need of the country’s power system – and seen most critical with the targeted integration of more renewables into the mix.