FGEN LNG Corp. said over the weekend the construction of its interim offshore liquefied natural gas receiving terminal is “substantially complete.”
FGEN LNG, a wholly-owned subsidiary of First Gen Corp., was originally looking at the completion of the project by the first quarter of 2023.
“What needs to be completed is the implementation of all control systems, which is not big in volume but imagine a car that is built,” First Gen executive vice president and chief commercial officer Jon Russell said during the Norway-Philippines Maritime & Energy Conference.
“We need to make sure we do that, and that will start to happen at the end of the year into the first [quarter] next year,” Russell said.
Russell said the first delivery of LNG won’t happen until July, “because that’s when we would have brought the FSRU [floating storage and regasification unit] and commissioned it. So we still got more time,” he said.
The company plans to deploy the FSRU to the First Gen Clean Energy Complex in Batangas City by second or third quarter next year.
FGEN LNG and BW LNG executed a five-year time charter party in April 2021 for the FSRU.
Russell said the FGEN LNG terminal would fill in whatever Malampaya could not supply.
“We will be looking at probably to consume up to half a million tons of LNG in the first year and possibly a million tons for the second year. But that could be adjusted up if demand requires it, so there’s some kind of flexibility,” Russell said.
Russell said FGEN LNG would also conduct a tender for the LNG supply. “We are not trying to slow things down, but we wanna get the best deal for everybody,” he said.
“I can’t tell at the moment because we are trying to get the best possible deal for the Philippines. We’ll keep the tender going until we are happy with the offer we get from suppliers,” he said.
Russell said the company was also waiting for the small-scale or modular LNG market to be established before it could firm up its plans.
“The potential is there, but there isn’t yet a good appreciation among potential users of what LNG is all about,” he said.
“But we’ve seen this in other markets. It is being done in Japan, it is being done in India and Australia and Europe where you take LNG in a truck or a small vessel to another location where industrial customers are located,” Russel said.
He said small-scale LNG projects could be done quickly.
“Until potential buyers are lined up, then we won’t move forward, but we have already made provisions to add these features, so the project is future-proof in that sense,” Russell said.
FGEN LNG is investing about P13.28 billion for the LNG facility, with a capacity of 5.26 million tons per annum, according to government data.
First Gen, a Lopez-owned company, is a leading gas power generation company in the Philippines, with about 2,000 megawatts of operating gas plants in Batangas City.