First Gen to proceed with crucial LNG hub sans PNOC help

/ 05:14 AM September 03, 2018

First Gen Corp. intends to do it alone with the construction of a liquefied natural gas (LNG) terminal in Batangas following Philippine National Oil Co.’s (PNOC) rejection of all unsolicited proposals to be the state-firm’s partner in a similar project.

PNOC officials, including its chair Energy Secretary Alfonso Cusi, maintained that such a project was capital intensive and dependent on existing demand that “it makes sense for only one” such project to be pursued.


Output from the Malampaya gas-to-power project is expected to begin dwindling by 2024 as the production field nears depletion.

Currently, there are five existing gas-fed power plants—all in Batangas—that depend on Malampaya for fuel.

These are the 1,000-megawatt (MW) Sta. Rita complex, 500-MW San Lorenzo facility, 414-MW San Gabriel plant and the 97-MW Avion plant, all part of the portfolio of First Gen. The fifth facility is the 1,200-MW Ilijan power plant, which is now part of the San Miguel group’s portfolio.

PNOC has been scouting for a potential partner or partners for its planned $2-billion LNG terminal with a holding capacity of 5 million tons per year.

First Gen has been working on a similar plan for the past several years, albeit at half the price of $1 billion but with the same storage capacity.

“First Gen confirms that [PNOC] has rejected First Gen’s proposal for the LNG terminal,” the Lopez group unit said in a regulatory filing.

First Gen said its unsolicited proposal sought the state firm’s participation in its onshore storage and regasification terminal that would be built in the First Gen Clean Energy Complex in Batangas City.

“First Gen’s plans to develop its LNG terminal remain on track, with First Gen in advanced stages of negotiation with potential partners,” the company added.

Earlier this year, the DOE said it was engaged with at least eight potential proponents for an LNG project.


These included PNOC and First Gen as well as Cleanway Energy Dept. Corp. of the United Kingdom; Japan’s Tokyo Gas Co. Ltd.; China National Offshore Oil Corp. (CNOOC); Vires Energy Corp. based in Singapore; South Korea’s SK E&S Co. Ltd.; and Carmine Energy Pte. Ltd. (also in Singapore).

Last May, First Gen president and chief operating officer Francis Giles B. Puno said the company “continue(d) to progress with the development of our LNG regasification facility, which we have been doing for the past five years.”

“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,” Puno said.

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