First Gen Corp. is inclined to develop its own liquefied natural gas (LNG) terminal to provide fuel to its power plants and other potential customers instead of taking part in a government-led consortium for a similar project.
Officials of the Lopez group company said this as gains from First Gen’s natural gas-fired assets tempered losses from geothermal facilities, with first quarter net income easing by 4 percent to $40 million.
This takes into account the effects of bad weather in the performance of subsidiary Energy Development Corp., whose net income dropped 15 percent to P1.5 billion.
Without EDC’s travails, First Gen said recurring net income surged by 34 percent to $60 million in the first three months of 2018.
According to First Gen, its natural gas platform delivered recurring earnings of $46 million against $19 million previously.
These assets include the 1,000-MW Sta. Rita complex, 500-MW San Lorenzo facility, 414-MW San Gabriel plant and the 97-MW Avion plant — all in Batangas.
At the same time, EDC’s geothermal plants saw earnings go down to $14 million from $32 million due to damage caused by Typhoon “Urduja” that hit Leyte in December 2017.
“The gas plants continue to demonstrate their importance to the grid by serving consumers with power needed at critical periods of the day,” FirstGen president and chief operating officer Francis Giles B. Puno said in a briefing.
“We continue to progress with the development of our LNG regasification facility, which we have been doing for the past five years,” Puno said. “Recent supply tightness makes it increasingly evident that we cannot afford to not have natural gas in the country’s energy mix.”
And while First Gen had expressed interest in partnering with state-run Philippine National Oil Co. to build a $2-billion LNG terminal with a capacity of 5 million tons yearly, Puno said the company would likely strike out on its own with a plan for the same capacity at half the cost or just $1 billion.
“Our position is that it is a real option for us to pursue. But, at the same time, we’re motivated to make sure that we have the cheapest sourcing of LNG gas for the consumers,” he said.
“If there are other options including that from the government to bring in cheaper LNG, then we’ll be happy to do that,” he said.
Even then, Puno said “it takes a long time to develop LNG” and First Gen wanted to start building by 2019 to ensure that a terminal would be available by 2024 when the Malampaya gas was expected to run out.
“We are still of the view today that the option that we have at the First Gen Clean Energy Complex is probably the most realistic option today and (at the) most advanced state of development,” he said.