Enough supply leads First Gen to defer LNG delivery
By Lenie Lectura – July 8, 2024
from Business Mirror
FIRST Gen Corp. (FGEN) will defer the delivery of an LNG (liquefied natural gas) cargo for its gas-fired power plants located at the First Gen Clean Energy Complex (FGCEC) in Batangas City.
The gas plants of Lopez-led FGEN, according to company president Francis Giles Puno, has enough supply for now.
“We’re rethinking because there is still gas. Malampaya is still there and we still have residual gas,” Puno told reporters. “We’re producing as much as we can. In the meantime, Malampaya gas is being mixed with LNG. So basically, we have to defer.”
FGEN was supposed to take delivery this month one LNG cargo after it awarded last month a contract to TG Global Trading Co., Ltd. (Tokyo Gas) for the supply of approximately 125,000 cubic meters with delivery on a Delivered Ex Ship (DES) basis to FGEN’s wholly-owned subsidiary, First Gen Singapore Pte. Ltd (FGEN Singapore).
The LNG cargo to be provided by Tokyo Gas would be delivered by an LNG carrier which will be unloaded into the storage tanks of the BW Batangas floating storage and regasification unit (FSRU) that is currently berthed at the FGCEC.
This is the fifth LNG cargo contract awarded by FGEN. The other four were awarded to Shell Eastern LNG, Trafigura, TotalEnergies Gas and Power Asia Private Ltd. and CNOCC Gas and Power Trading & Marketing Ltd.
FGEN has a portfolio of four existing gas-fired power plants with a combined capacity of 2,017 megawatts (MW) that have been supplied for many years with gas from the Malampaya field, an indigenous offshore gas field.
FGEN LNG Corporation, a subsidiary of FGEN, has constructed its interim offshore LNG terminal and executed a five-year time charter party for the charter of the BW Batangas, which will provide LNG storage and regasification services.
Another reason for the deferment of the LNG shipment is the LNG cost recovery method that has yet to be released by the Energy Regulatory Commission (ERC).
“We are also going through a clearance with the ERC and the DOE (Department of Energy) on our ability to recover the cost for the operations of the LNG,” Puno said.
The FGEN LNG terminal will accelerate the ability to introduce LNG to the Philippines, to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN’s affiliates. FGEN believes the FGEN LNG terminal will play a critical role in ensuring the energy security of the Luzon grid and the Philippines.
