FGEN LNG Corp., a wholly-owned subsidiary of First Gen Corp., said Monday it signed a five-year contract with BW FSRU IV Pte Ltd., a wholly-owned subsidiary of BW Gas Ltd., for the charter of a floating storage re-gasification unit in Batangas City.
“The project will allow FGEN LNG to accelerate its ability to introduce LNG to the Philippines as early as third quarter 2022, to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN LNG affiliates,” First Gen said in a disclosure to the stock exchange.
An FSRU is a liquefied natural gas carrier capable of storing LNG. It has an onboard re-gasification plant capable of returning LNG into a gaseous state and then supplying it directly into the gas network.
The FSRU BW Paris has an LNG storage capacity of 162,400 cubic meters and a nominal and peak gas send-out capacity of 500 million standard cubic feet per day and 750 MMscfd, respectively.
“To put this in context, the nominal send-out capacity of the BW Paris is 25 percent more than the production capability of Malampaya, which at its peak produced a maximum gas volume of approximately 400 MMscfd, and which is now declining,” said First Gen which is controlled by the Lopez Group.
BW Paris is also capable of providing ancillary services such as the reloading of LNG into trucks and small-scale LNG vessels, which can then distribute LNG to nearby industrial areas and the rest of the Philippine archipelago.
The BW Group has strong connections to the Philippines, having established BW Shipping Philippines Limited in 1988, which has become a leading provider of more than 2,700 highly competent Filipino seafarers.
The group employs more than 3,700 Filipino seafarers estimated by BW to contribute more than $80 million per annum to the Philippine economy.
“FGEN LNG believes the project will play a critical role in ensuring the energy security of the Luzon grid and the Philippines, particularly as the indigenous Malampaya gas resource is expected to be less reliable in producing and providing sufficient fuel supply for the country’s existing gas-fired power plants, and even less so for additional gas-fired power plants,” the company said.
It said the entry of LNG would encourage new power plant developments, industrial and transport industries to consider it as a replacement to more costly and polluting fuels.
First Gen president and chief operating officer Francis Giles Puno earlier said they planned to commence the construction of the LNG terminal in April “which puts the company in a good position for expanding its gas portfolio especially after the recent DOE coal moratorium.”