Construction of LNG facility to start in 2016

LOPEZ-LED First Gen Corp. is getting ready to build the $1-billion liquefied natural gas (LNG) regassification and terminal project that will fuel its gas-fired power plants in Batangas province.

Company president and COO Francis Giles B. Puno said the engineering, procurement and construction (EPC) contract for the LNG terminal would be bid out next year.

“We’ve short listed the potential contractors (to) five,” Puno said, adding that the feasibility study for the project has been completed. Site design is underway and site preparation will start next year with the chosen EPC contractor.

Puno said First Gen was talking to both local and foreign firms to become partners in the project.

“The capex (capital expenditure) is somewhat large. What we’re talking about is about a billion dollars for the LNG terminal. So it’s hard for us to fund alone,” he said.

But time is on First Gen’s side because its contract with the Malampaya gas platform consortium, which supplies fuel to its existing gas-fired power plants, will end sometime in 2022 to 2024. The Lopez-led firm’s LNG terminal is expected to be completed by 2021.

“We have enough time to build the LNG regassification [terminal] in time for the expiration [of the Malampaya contract],” Puno said.

Primarily designed to have pipelines to nearby gas-fired power plants, the LNG terminal will also host trucks that can deliver natural gas to other power stations and industrial parks in the Calabarzon area.

“Once we build the gas terminal, its designed to be able to send lorries, trucks to the industrial partners so we can load LNG in Batangas and send to said parties in Cavite and Batangas and deliver gas to those markets,” Puno said.

Tractebel Engineering Pvt. Ltd. of the GDF Suez group is refining the detailed design for the terminal. European and Japanese firms are among those interested in the onshore LNG regassification and import terminal that will be integrated into an existing complex of power plants.

The LNG supply contract will be tendered in parallel with the construction contract. Global suppliers could bid for the supply, Puno said.

Earlier, Puno said First Gen was willing to take a 50-percent stake in the project and the rest might be divided among the prospective partners.

The Malampaya gas field fuels First Gen’s power plants, which supply about 40 percent of the power needs of Luzon.

First Gen wholly owns the 1,000-MW Santa Rita and the 500-MW San Lorenzo natural gas-fired combined cycle power plants.