First Gen awards fresh LNG cargo deal to Shell Eastern

Power producer First Gen Corp. of the Lopez group has awarded its latest liquefied natural gas (LNG) contract to Shell Eastern, an official said on Thursday.

According to First Gen chair and chief executive Federico Lopez, Shell Eastern secured the deal for fresh LNG cargo delivery earlier this week. Under its bid notice, the shipment should arrive by October this year.

This came just two weeks after the firm invited players in the LNG space to join its auction, with its subsidiary First Gen Singapore Pte. Ltd. seeking about 154,500 cubic meters of LNG.

READ: First Gen, PLDT group seal new power deal

It said the cargo would be shipped to the Subic Bay Freeport in Zambales, where it would be loaded into BW Batangas, a floating storage regasification unit.

It was not clear if the latest contract could be considered its fifth cargo, as its agreement with Japanese firm TG Global Trading Co. faces delays due to vessel repairs.

The executive also expressed openness to purchasing more LNG this year.

“As long as it’s needed, we will. As long as it’s needed because you gotta keep the lights on. But again, as we’re saying, it’s always better if you can get into large volumes,” he told reporters on the sidelines of the Net Zero Conference in Makati City.

Best benefit

Lopez mirrored the previous statement of Francis Giles Puno, First Gen president and chief operating officer, on the need to get long-term supply contracts.

“For me, I think at some point, the country really wants to get the best benefit [from] LNG, long-term contracting is better … You get better terms, and the country will get better terms and prices if you do it that way. I think that’s really where we really need to head,” he said.

The group welcomed its first LNG cargo in Subic last August 2023. Subsequent deliveries were received at its Batangas complex in December 2023, and February and May of this year.

First Gen has a network of four gas-fired power plants in Batangas with a combined installed capacity of 2,017 megawatts: San Lorenzo, San Gabriel, Santa Rita and Avion. INQ