First Gen unit seeks DOE nod to build LNG terminal in May

By Lenie Lectura -March 6, 2020
from Business Mirror

FGEN LNG Corp. (FGEN LNG) is seeking the Department of Energy’s (DOE) approval to allow it to start the construction of its planned liquefied natural gas (LNG) terminal.

The wholly owned subsidiary of Lopez-led First Gen Corp. (First Gen) filed Thursday an application for a Permit to Construct, Expand, Rehabilitate and Modify (PCERM) an Interim Offshore LNG Terminal within the First Gen Clean Energy Complex in Batangas City.

The permit, when issued, will allow the company to modify an existing liquid fuel jetty that will enable it to become multiple-use, allowing the receipt of large and small-scale LNG vessels, as well as liquid fuel vessels, and build an adjunct onshore gas receiving facility.

“FGEN LNG anticipates that, if the PCERM is granted by the DOE, it will be able to commence construction as early as May of this year, in order to be able to receive LNG as early as the third quarter of 2022,” it said.

The plan is to modify First Gen’s existing jetty to enable LNG to be brought in via a floating storage and regasification unit (FSRU) on an interim basis and, thus, accelerate FGEN LNG’s ability to introduce LNG to the Philippines.

An FSRU is an LNG storage ship that has an onboard regasification plant capable of returning LNG back into a gaseous state.

“FGEN LNG believes that the Project, and the early entry of LNG, 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,” it said.

Also, First Gen’s LNG project will serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN LNG affiliates. “The entry of LNG will encourage new gas-fired power plant developments, as well as industrial and transport industries to consider it as a replacement to more costly and polluting fuels,” it said.

First Gen already operates four gas-fed power plants with an aggregate capacity of about 2,000 megawatts. These are the 1,000-MW Santa Rita, 500-MW San Lorenzo, 414-MW San Gabriel and 97-MW Avion.

The gas contracts inked between the Malampaya consortium and gas power plants will expire in 2021. Thus, gas plants must look for other sources before their contract expires.

FGEN LNG’s application is required by the Philippine Downstream Natural Gas Regulation (PDNGR), and in compliance with the conditions of the notice to proceed granted by the DOE in March 2019.

The planned LNG Terminal has been declared as an Energy Project of National Significance, under Executive Order 30, by the Energy Investment Coordinating Council through the DOE.

The company has completed predevelopment work to make the site construction-ready. A groundbreaking ceremony was held in May last year at the First Gen Clean Energy Complex in barangays Santa Clara, Santa Rita Aplaya and Bolbok, Batangas City.