MANILA, Philippines — Lopez-led First Gen Corp. is seeking government clearance to build a floating storage and regasification unit (FSRU) at its Batangas liquefied natural gas terminal.
In a disclosure to the Philippine Stock Exchange Thursday, First Gen said its wholly owned subsidiary FGEN LNG Corp. submitted an application to the Department of Energy (DOE) for a permit to construct, expand, rehabilitate and modify (PCERM) for interim offshore LNG terminal within the First Gen Clean Energy Complex in Batangas City.
The application is in compliance with 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 permit sought consists of construction works necessary to modify First Gen’s 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 to build an adjunct onshore gas receiving facility.
If the application is granted by the DOE, FGEN LNG could commence project construction as early as May this year in order to be able to receive LNG as early as the third quarter of 2022.
Once completed, the project will allow First Gen to be able to bring in an FSRU on an interim basis and thus accelerate FGEN LNG’s ability to introduce LNG to the Philippines.
The FSRU is a LNG storage ship that has an onboard regasification plant capable of returning LNG back into a gaseous state.
“This innovation can readily serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN LNG affiliates and bring the country closer to its goals of energy security, expanded energy access and low-carbon future which are among the stated objectives of the Philippine Energy Plan 2017-2040,” First Gen said.
Last year, the company decided to bring in a FSRU to be able to start importing gas supply within the Duterte administration, way ahead of the expiration of the Malampaya service contract in 2024. An on-shore LNG terminal will then be built for the long term.
The initial project will play a critical role in ensuring the energy security of the Luzon grid and the whole country.
This 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.
“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,” First Gen said.
The interim offshore LNG terminal represents the initial phase of the FGEN Batangas LNG Terminal which was previously declared by the Energy Investment Coordinating Council through the DOE as an energy project of national significance under Executive Order No. 30.