First Gen open to 30% stake in planned LNG terminal

MANILA, Philippines -  Lopez-led First Gen Corp. is open to acquiring at least a 30-percent stake in the government planned liquefied natural gas (LNG) terminal to finally get the project running and support the country’s natural gas requirements moving forward.

In a briefing yesterday, First Gen president and chief operating officer Francis Giles Puno said the company is in favor of the development of a LNG terminal because it is crucial in addressing the depletion risk of the Malampaya project by 2024.

The company had discussions with state-run Philippine National Oil Co. (PNOC) on possible options available for the development of the LNG terminal.

“That’s the discussion we’re having with PNOC, how do we ensure we cooperate with them in order to ensure that this investment pushes through. The role of PNOC is obviously an important role,” Puno said.

The company official, however, said talks with PNOC are not yet final.

“It’s not in an advance phase where we can sign anything… but I think all our discussions have been serious not only with PNOC, but also with others,” Puno said.

Now is the good time for the country to start investing in the LNG industry since there is an abundant supply globally, First Gen chairman and chief executive officer Federico Lopez said in the same briefing.

“There are many existing projects today that still don’t have markets. There are many reserves that have not been developed, tapped. It’s actually a very good time,” he said.

If discussions push through in building the LNG terminal, First Gen is eyeing to secure a significant ownership of 30 to 35 percent in terms of equity.

“On the equity front, we’ve always been flexible. Right now, we’re solely underwriting the risk. but the whole idea is bring in partners and to cooperate with a number of partners for LNG to be able to make sure that the LNG terminal is built,” Puno said.

“What we’d like is to have a significant ownership. What that means is it can be as little as 30 percent and have others doing it depending on who will comprise the total consortium,” he said.

Earlier, the Lopez-led firm said it will aggressively pursue its $1-billion LNG terminal within its clean energy complex in Batangas. It houses the 1,000-megawatt (MW) Sta. Rita, 500-MW San Lorenzo, 414-MW San Gabriel and 97-MW Avion gas plants.

Puno said putting up the LNG terminal in their property would be more advantageous for the country since a lot of work has already been done in the area to ensure that area is a feasible site.