FGEN LNG Corp., a wholly-owned subsidiary of First Gen Corp., said Friday it received a permit from the Department of Energy to construct an interim offshore liquefied natural gas project in Batangas City.
First Gen said in a disclosure to the stock exchange Friday it received on Sept. 23 a permit to construct, expand, rehabilitate and modify an interim offshore LNG terminal in the First Gen Clean Energy Complex in Batangas City. FGEN LNG submitted the application to the DOE on March 4, 2020.
First Gen said the project involves construction works needed to modify the jetty facility that will enable it to become a multi-purpose jetty and the development of an adjunct onshore gas receiving facility.
It represents the initial phase of the FGEN Batangas LNG Terminal that was previously declared by the Energy Investment Coordinating Council through the DOE as an energy project of national significance under Executive Order No. 30.
A PCERM is a permit issued by the DOE under the Philippine Downstream Natural Gas Regulation that authorizes the construction of a downstream natural gas sacility such as an LNG Terminal.
First Gen is the only company in advanced stage of an LNG project.
“We are thankful to Secretary [Alfonso] Cusi, and to the Downstream Natural Gas Review and Evaluation Committee of the DOE, for the support and guidance that they have provided during the evaluation process, especially given the difficult circumstances created by the COVID-19 pandemic, and for issuing the PCERM,” said First Gen executive vice president and chief commercial officer Jonathan Russell.
First Gen said once it completed the preparations such as the design and implementation of enhanced work and safety protocols and procedures required to minimize the impact of COVID-19 on construction personnel and the local community, the construction phase of the project might begin by the end of third quarter or early fourth quarter.
The company is also preparing to issue a binding invitation to tender for a floating storage and regasification unit upon completion of the non-binding process.
It said three experienced FSRU providers, incluing BW Gas Limited, GasLog LNG Services Ltd. and Hoegh LNG Asia Pte Ltd. already expressed interest in providing the FSRU that would provide LNG storage and regasification services to the project once constructed.
The project will allow FGEN LNG to accelerate its ability to introduce LNG to the Philippines as early as the third quarter of 2022 to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN LNG affiliates.
FGEN LNG said the project would play a critical role in ensuring the energy security of the Luzon Grid and the Philippines, as the indigenous Malampaya gas resource was expected to be less reliable in producing and providing sufficient fuel supply for the gas-fired power plants and even less so for additional gas-fired power plants starting 2024.
The entry of LNG is expected to encourage new power plant developments and industrial and transport industries.
