The Lopez-led First Gen Corp. is eyeing to invest as much as $1 billion—or roughly P43 billion at the prevailing exchange rate—to finally pursue the expansion of its two natural gas-fired facilities in Batangas through the 500-megawatt San Gabriel power project.
In a text message, First Gen president Francis Giles B. Puno said that the company will now be able to proceed with the project after its buyout of the 40-percent stake held by the British Gas Group in First Gas Holdings and subsidiaries, FGP Corp. and First NatGas Power Corp., which is the corporate vehicle for the San Gabriel project.
“Buying out BG [Group] in First Gas helps unlock the gas portfolio growth. We will now accelerate development of the San Gabriel project. We are looking at options regarding the size of the plant,” Puno said in the text message.
Based on preliminary estimates, First Gen is looking at a capacity between 300 MW and 500 MW, which will cost some $600 million to $1 billion. Depending on the availability, the gas can come from the remaining gas from the Malampaya gas field off Palawan or the company can opt for the importation of liquefied natural gas (LNG).
Once the San Gabriel project is completed, First Gen will have control over three gas facilities, which can generate as much as 2,000 MW. The other two are the 1,000-MW Sta. Rita and the 500-MW San Lorenzo gas plants, which already contribute roughly a fifth of Luzon’s power requirements.
Puno had explained that it was difficult for First Gen to expand their gas projects previously because they needed to get the consent of their former partner, the BG Group, which was then no longer committed to growing the business.
It was only last week that First Gen was able to finally acquire the 40 percent stake of the BG Group for $360 million, which effectively gave the Lopez firm full control over the Sta. Rita and San Lorenzo gas facilities. Almost the entire proceeds from an earlier issuance of preferred shares, which raised P10 billion, were used for the buyout.
Apart from the San Gabriel gas project, the company earlier said it was looking to spend some P10 billion for the 30-MW Puyo and 23-MW Bubunawan hydropower projects in Mindanao.
These two proposed facilities formed part of a hydropower portfolio, which will see the construction of a total of five plants that can generate about 100 MW combined. The other power projects in the pipeline are expected to be put up in Cabadbaran, Agusan Norte; and in Tumalaong River and Tagoloan River, both in Bukidnon.
First Gen will likewise be shelling out funds for the $260-million Burgos wind power project of its affiliate, Energy Development Corp.