PHOTO: First Gen Corp. LinkedIn
MANILA, Philippines -The Lopez family’s power firm First Gen Corp. will lease out its natural gas terminal in Batangas province to Razon-led Prime Infrastructure Capital Inc. (Prime Infra) for 15 years to support the latter’s gas aggregation strategy and ensure ample power supply in the country.
In a stock exchange disclosure on Wednesday, First Gen said its liquefied natural gas (LNG) unit, FGen LNG Corp., had executed the terminal lease agreement with Gas Aggregator Philippines Inc., a wholly owned subsidiary of Prime Infra.
“The lease of the FGen LNG terminal will form part of Prime Infra’s proposed gas aggregation strategy that will enable it to deploy a tolling business model, which will in turn allow it to leverage on its existing Malampaya project facilities and its expertise in the natural gas market,” First Gen said in its disclosure.
Gas aggregation combines the gas needs of multiple consumers to form a single purchasing entity.
Gas aggregation
The two companies first announced the deal in June, when they signed a memorandum of understanding for the lease and operation of the LNG terminal at the First Gen Clean Energy Complex in Batangas City.
READ: FGEN LNG and Prime Infra form alliance on lease of Batangas LNG terminal
Prime Infra currently holds a 45-percent operating stake in the Malampaya deep water gas-to-power concession that was recently extended by another 15 years.
The company had said the gas aggregation framework would help enhance energy security, encourage “a more competitive market” for power generation, and complement ongoing commercial development of new indigenous gas fields.
READ: DOE backs Prime Infra gas aggregation framework
Energy Secretary Raphael Lotilla had backed the strategy, saying that it could help soften the prices of imported LNG while output from Malampaya continued to deplete. INQ