First Gen set to expand gas, power gen portfolio

MANILA, Philippines - Having acquired full control over two gas facilities located in Batangas, First Gen Corp. is gearing up to expand its gas power generation portfolio to as much as 2,800 megawatts by 2018 with investments estimated to reach more than $1 billion, sources said.

The expansion comes in the heels of the purchase of the 40 percent stake held by the British Gas Group in Lopez-led subsidiaries that own and operate the San Lorenzo and Sta. Rita gas plants, which have a combined capacity of 1,500 MW.

The first phase of the expansion involves the construction of the planned 400-500 MW San Gabriel natural gas facility, slated for completion in the fourth quarter of 2015.

The second phase, which involves the establishment of an additional 800 MW, is expected to be completed in 2018.

The project is intended to address the anticipated huge demand for electricity come 2015.

First Gen is in talks with the Malampaya natural gas consortium consisting of Royal Dutch Shell Plc. and Chevron Texaco, to secure adequate supply of natural gas at a reasonable price.

Both Sta. Rita and San Lorenzo plants source fuel from the Malampaya field under a contract set to expire in 2024.

Given the sheer size of the required investment, First Gen is taking in partners to help secure a guaranteed off-take for the plants’ output.

First Gen earlier said it was in discussions with power utility giant Manila Electric Co. as possible partner for the San Gabriel project.

To date, First Gen and its units have a gross generating capacity of 2,763 MW, of which 1,500 MW is natural gas, 1,129 MW is geothermal and 134 MW is hydropower.

The company accounts for 18 percent of the country’s total installed power generation capacity.