First Gen Corp. said Monday it chose JGC Corp. of Japan as the preferred contractor for the engineering, procurement and construction of a $1-billion liquefied natural gas project in Batangas province.
The project, to be built in the First Gen Clean Energy Complex in Barangays Sta. Clara, Sta. Rita Aplaya and Bolbok, Batangas City, is being developed by First Gen through wholly-owned subsidiary FGen LNG Corp.
“We congratulate JGC for all of their hard work which has led to them being awarded preferred tenderer status for First Gen’s LNG terminal project,” First Gen executive vice president and chief commercial officer Jonathan Russell said in a statement.
“We look forward to working with JGC to make this energy project of national significance a success, as the project is crucial to ensure the continued operations of the 3.2 gigawatts existing natural gas-fired plants given the expected and continuing reduction in gas supply from the Malampaya field up to the expiration of the contracts by 2024,” Russell said.
JGC, which is listed on the Tokyo Stock Exchange, has a track record of executing more than 20,000 projects in over 80 countries. These projects have centered on the oil and gas sector, including oil, natural gas, petrochemicals and gas chemicals as well as a variety of other business sectors including energy infrastructure.
First Gen said the selection of JGC marked the conclusion of an extensive EPC tendering phase which commenced in 2014, during which around 22 companies were invited and 18 expressed an interest to participate in the tender process and work on the project.
“In the short term, we look forward to working with JGC to explore the exciting possibility of modifying First Gen’s existing jetty that would enable LNG to be brought in via an FSRU [floating storage regasification unit] on an interim basis during the term of President Duterte. This would reduce the strain on Malampaya as its reliability continues to decline up to 2024, increasing the energy security of the Philippines and reducing the number of times that FGEN will be requested to run on liquid fuel when Malampaya gas is unavailable,” Russell said.
He said the early introduction of LNG by FGen would also enable LNG to immediately become a fuel choice for any developer that is considering the building of new gas-fired power plants with a lower carbon footprint that will support the introduction of more intermittent renewables for the Philippines as an alternative to building new coal-fired power plants.
It would also offer a potential means for the 1,200-megawatt Ilijan project to receive gas after its contract with Malampaya ends in 2022, he said.
The LNG project is consistent with both the Energy Department’s Nine Point Energy Agenda and PEP 2017-2040 as it promotes LNG importation as an option to supplement and replace Malampaya gas, ensuring a sustainable supply to develop LNG for the future in anticipation of the depletion of the Malampaya resource.
The project was declared as an “energy project of national significance” in August 2019 in accordance with Executive Order No. 30 on the basis that the project will require the development of significant infrastructure and capital investment involving complex technical processes and engineering designs that will result in a substantial positive impact on the environment.