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First Gen unit seeks go-ahead to build LNG terminal

/ 05:14 AM December 22, 2018

First Gen Corp. yesterday said its subsidiary had asked for the Department of Energy’s (DOE) green light on its plan to build a liquefied natural gas terminal in Batangas City through a partnership with Tokyo Gas Co. Ltd.

First Gen said in a regulatory filing that FGEN LNG Corp. was seeking a notice to proceed as required under the DOE-issued Philippine Downstream Natural Gas Regulation.

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To be located in the First Gen Clean Energy Complex, 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.

Aside from providing the fuel needs of existing power plants, the facility dubbed FGEN Batangas LNG Terminal Project is intended to cater to future gas-fired power plants FGEN LNG affiliates and third parties.

Earlier this month, First Gen and Tokyo Gas announced their signing of a joint development agreement related to this project.

The Japanese firm will take a 20-percent participating interest in the FGEN LNG Project and provide support in development work to achieve a final investment decision.

In a report released last week, Fitch Solutions Macro Research said the Philippines should take advantage of favorable liquefied natural gas prices and start importation in the next quarters.

Fitch Solutions said global LNG prices were projected to be stable over the next two years amid accelerating supply growth and liquefaction capacity additions across the globe.

“From a price standpoint, the next few quarters will be an opportune time for the Philippines to commence LNG imports,” Fitch Solutions said.

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“The Philippines has yet to enter into any LNG supply contracts for its terminals, and as such, will have plenty of contracting opportunities amid a positive backdrop of competitive spot prices and a wave of new supplies emerging from the United States, Russia and Asia during the first few years of LNG imports,” it added.

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TAGS: Department of Energy’s (DOE), First Gen Corp., liquefied natural gas terminal
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