New power plant, LNG terminal to rise in Batangas

BATANGAS CITY—First Gen Corp. of the Lopez family plans to start building next year a new 1,200-megawatt gas-fired power plant in its Clean Energy Complex here, along with a $1-billion liquefied natural gas (LNG) terminal that it is building in partnership with Tokyo Gas Co. Ltd.

The partners yesterday held a “kagami biraki” ceremony—a traditional Japanese rite performed when celebrating New Year as well as when embarking on new endeavors.

The LNG project is meant to ensure continuous fuel supply for power plants that currently rely on Malampaya gas.

There is no new discovery of gas fields in the Philippines yet and Malampaya is expected to start producing less fuel by the mid-2020s.

First Gen operates four gas-fed power plants with an combined capacity of more than 2,000 megawatts, including the 1,000-MW Santa Rita, 500-MW San Lorenzo, 414-MW San Gabriel and 97-MW Avion—all of which sit adjacent to the LNG project site.

Aside from these, there is also the 1,200-MW Ilijan power plant, also located in Batangas and operated and managed by the San Miguel group under contract with the government.

The two-phase LNG project will have two storage tanks with respective send-out capacities of up to 5 million and 2 million tons annually. This will be Tokyo Gas’ first such facility outside Japan.

Jonathan Russel, First Gen executive vice president and chief commercial officer, said in an interview the company’s goal—aside from building the LNG terminal—was to keep all the power plants relying on Malampaya gas running even after the anticipated decline of output and build additional generators.

Russel said the first phase of the LNG terminal—featuring the 5-million-tons-a-year storage tank—could support up to 5,000 MW of power generation capacity. With the existing 3,200 MW of power plants, that leaves a spare fuel supply for up to about 1,800 MW of additional capacity.

“There’s a need for new [generating] capacity by 2024 so we’d like to start construction of those [generators] also soon so that they can also start to deliver power using LNG by that time,” Russel said.

“We need to have them (two generators of up to 600 MW each) built by 2023, so we can start building them in 2020,” he added.

A new subsidiary, First Gen LNG Corp., has completed significant predevelopment work for the LNG terminal to make the project site “construction ready.” A final investment decision is expected to be made early next year, along with the sign-up of additional partners for the project.

Once completed, the LNG terminal will allow the importation of LNG not only for the supply needs of the power plants, but also for other potential gas consumers.

First Gen chair and chief executive Federico R. Lopez said the entry of LNG into the Philippine market would encourage both the industrial and transport industries to consider natural gas “as a replacement to more costly and polluting fuels.”