FGen LNG Corp., a wholly-owned subsidiary of First Gen Corp., said Tuesday it received the formal approval of its application to proceed with the construction of the FGen Batangas liquefied natural gas terminal project in Batangas City.
“The FGen Batangas LNG Terminal Project is intended to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGen LNG affiliate,” First Gen said in a disclosure to the stock exchange.
The notice to proceed is a requirement under the Energy Department’s Philippine Downstream Natural Gas Regulation. First Gen’s LNG terminal project is located in the First Gen Clean Energy Complex in Batangas City.
First Gen owns 2,000 megawatts in operating gas assets composed of four gas-fired power plants–the 1,000-megawatt Santa Rita Power Plant, the 500-MW San Lorenzo Power Plant, the 414-MW San Gabriel Power Plant and the 97-MW Avion Power Plant. These facilities feed on natural gas from the Malampaya gas field.
Energy Secretary Alfonso Cusi signed the notice allowing FGen LNG to proceed with the $1-billion LNG project in partnership with Tokyo Gas Co. Ltd. on March 7.
Cusi said FGen had no overlapping market with Tanglawan Philippine LNG Inc., the consortium of Phoenix Petroleum Philippines and CNOOC Gas and Power Group Co. Ltd., which was also given an NTP for a separate LNG project.
“No [overlapping market], otherwise we will not have approved it. It was approved because they have a different business model and they can stand and live up to their business model,” Cusi said.
First Gen president Francis Giles Puno said the NTP was a “positive development.”
“The next phase is the selection of the contractor. The main reason for selecting the contractor is to firm up the cost of the project… Hopefully, we move towards financing close,” he said.
Puno said First Gen was expecting to complete the partnership arrangement within the year and start the construction of the project next year.
“We’re going through this phase now with the final design of the facility and then hopefully we make a decision on the contractor. In the meantime, we’re also looking at other partners who are available,” he said.
Puno said other foreign investors expressed interest in joining the project.
“For me, it improves our likelihood to be able to proceed with the project,” he said.
“I think I can say is that we’re just flexible because we need to make sure it proceeds. But fortunately, it’s not the lack of interest from other investors. It’s in a way a good position because there seems to be a lot of interest,” he said.
Puno said First Gen was looking at a capacity of about 3 million to 5 million metric tons of LNG depending on the shipment and the usage.