First Gen Corp. said it had signed with Tokyo Gas Co. Ltd. a joint development agreement related to an LNG (liquefied natural gas) terminal project in Batangas.
The planned facility, being pushed by First Gen subsidiary FGEN LNG Corp., is to be located at their Batangas Clean Energy Complex.
First Gen currently operates four gas-fed power plants with an aggregate capacity of about 2,000 megawatts, and which are in need of a new source of fuel with gas supply from the Malampaya project expected to start declining in a few years.
These plants include the 1,000-MW Santa Rita, 500-MW San Lorenzo, 414-MW San Gabriel and 97-MW Avion — all of which are also in Batangas.
First Gen said that beyond fueling its generators, LNG infrastructure was considered vital in maintaining and enhancing the country’s energy security when the Malampaya gas field was depleted.
The company said in a statement that Tokyo Gas would take a 20-percent participating interest in the FGEN LNG project, and provide support in development work to achieve a final investment decision (FID).
If and when such a decision is reached, First Gen and Tokyo Gas will enter into a definitive agreement to proceed with construction of the project.
“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,” First Gen president Giles B. Puno said.
“[The two firms] intend to cooperate with all relevant stakeholders who share the same vision to participate in making LNG viable for the Philippines,” Puno said.
With 50 years in the LNG business, Tokyo Gas is one of the world’s largest buyers of LNG with 14 million tons yearly.—RONNEL W. DOMINGO