First Gen scouting for foreign partners, loans for $1-B liquefied natural gas project

First Gen Corp. of the Lopez group is getting ready to proceed with its $1-billion liquefied natural gas (LNG) terminal project in Batangas as it talks to European and Japanese firms for partnership.

FGC president and COO Francis Giles B. Puno told reporters on the sidelines of the Natural Gas Summit 2015 in Makati City that the company was talking with European and Japanese firms interested in the onshore LNG regassification and import terminal.

The facility will be integrated into an existing complex of power plants owned and operated by First Gen.

Of the roughly $1-billion required investment, about 70 percent may be financed through foreign and local loans, Puno said.

Tractebel Engineering Pvt. Ltd. of the GDF Suez group has completed the detailed design for the terminal, paving the way for the construction contract to be bid out, Puno said.

First Gen may make an investment decision on the LNG terminal in the first half of 2015 and if it does so, the project may be completed by 2020 or 2021, ahead of the expected depletion of the Malampaya gas project from 2024.

The LNG supply contract will be tendered in parallel with the construction contract.

Shell, TOTAL, BP and other global players are welcome to bid for the supply, he said.

Shell leads the Malampaya gas operation off Palawan that currently supplies First Gen’s gas power plants.

An initial investment, meanwhile, has also been allotted for the LNG facility.

First Gen’s parent firm, First Philippine Holdings Inc. (FPH), has set aside an initial P14.5 billion ($328.51 million) for the LNG project.

In a disclosure, FPH said its board of directors had approved the appropriation of retained earnings.

Of the P26.43-billion total allotment, about P14.5 billion will be invested in the LNG project, P3.1 billion will be invested in “other subsidiaries,” P4.97 billion will be for debt service, P2.655 billion will be for share buyback and P1.2 billion will be for general corporate purposes.

First Gen was incorporated on Dec. 22, 1998, as a subsidiary of FPH.