Lopez Group firms up LNG plan

MANILA, Philippines - The Lopez Group is firming up its plan to put up a liquefied natural gas (LNG) import and regasification terminal in the country, a ranking official said yesterday.

“LNG is the most viable option to ensure a cleaner and sustainable fuel mix for the country…We’re preparing an LNG terminal,” said Francis Giles Puno, president of First Gen Corp., the Lopez-owned power generation company.

LNG is natural gas that has been converted into liquid for ease of storage or transport.

Puno said with the predicted 2024 depletion of natural gas from the deep water-gas-to- power Malampaya project in offshore Palawan – which supplies power to First Gen’s 1,000-megawatt Santa Rita and 500-MW San Lorenzo natural gas plants – First Gen has no choice but build its LNG terminal also in Batangas, beside its power plants.

In an interview with reporters on the sidelines of a natural gas summit, he said the company is still determining when exactly it could bid out the contract for the construction of the terminal.

The company is also in talks with potential LNG suppliers while it firms up the construction of the terminal.

All global players such as Shell and Total are possible suppliers.

Puno said the company may also bring in partners for the project, considering the capital expenditure requirement of the terminal stands at over $1 billion.

 “Currently, the project is being undertaken by us, First Gen, but it doesn’t mean that we will not bring in partners. The capex spend is over $1 billion. We will have to determine the bankability and on top of that determine the partners so we will talk to many players,” Puno said.

He noted for instance that the company may need a technical partner to assist in the operations and maintenance of the terminal.

In a separate disclosure to the Philippine Stock Exchange, First Philippine Holdings Corp., the holding company of the Lopez Group, said the company has approved the allocation of P14.5 billion as investment for the group’s LNG project.

In May last year, First Gen chairman Federico Lopez said the planned LNG terminal may already be powering First Gen’s natural gas plants by 2019.