Batangas City―FGen LNG Corp., a joint venture of First Gen Corp. and Tokyo Gas of Japan, on Tuesday broke ground on the $1-billion liquefied natural gas terminal project and announced plans to build another 1,200-megawatt natural gas projects in this city.
Once completed, the LNG terminal will allow the Philippines to import and store LNG and ensure a stable supply of clean energy after the Malampaya natural gas field in northwest Palawan is depleted by 2024.
“First Gen’s calculations show that there is a need for new capacity to be added in the Philippines by 2024 in order to avoid future power shortages as a result of load growth,” said First Gen executive vice president and chief commercial officer Jon Russell.
“Fortunately, First Gen has sites within its Clean Energy Complex to allow up to 1.2 gigawatts [1,200 MW] to be added quickly, given the much shorter construction time for CCGT [combined cycle gas turbine] versus coal, and we stand ready to add such capacity,” said Russell.
FGen LNG held the traditional “kagami biraki” groundbreaking ceremony for the LNG terminal with a projected capacity of 3 million to 5 million tons per annum at the First Gen Clean Energy Complex here.
The company hopes to start the actual construction of the LNG terminal next year as the final investment decision is being eyed late this year or early next year.
Russel said that in parallel with the LNG hub, the company was planning to build two more power generation units with a combined capacity of 1,200 MW next year with completion eyed by 2023.
“We need to build them by 2023, so we can start [the construction] in 2020,” Russel said.
He warned that if 3,200 MW of natural gas-fired capacity became unavailable with the depletion of Malampaya natural gas, future power shortages would become acute in the coming years.
“And we have certainly all seen how precarious the grid has been this summer even with those gas plants running. Using LNG will not only ensure a reliable gas supply that will enable the existing gas plants to continue to run, but will pave the way for new flexible gas-fired plants to be added to the grid,” he said.
Russell said FGen LNG was also eyeing the creation of an inter-island liquefied natural gas distribution network to serve the island grids as a part of the new markets for the $1-billion LNG terminal project.
“First Gen anticipates the creation of an inter-island LNG distribution network that will enable LNG to be brought to other islands of this archipelagic nation, so that others may enjoy the benefits of clean, flexible and reliable natural gas as an alternative to expensive and environmentally detrimental power generation,” Russell said.
The LNG terminal is seen to be the most significant addition to the country’s energy infrastructure this decade, as it will provide much-needed energy security to the nation and help decarbonize the economy.
The project will also help ensure the continued supply of cost-competitive, flexible and low-carbon fuel for gas-fired power plants in the country with a capacity of 3,200 megawatts.
These existing facilities which currently provide 30 percent of power generated for the Luzon grid include the 1,000-MW Santa Rita, 500-MW San Lorenzo, 97-MW Avion and 1,200-MW Ilijan power plants.
Aside from supporting the existing plants, the project will provide fuel for more than 2,000 MW of new capacities that the other energy industry players plans to develop.
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