First Gen needs to complete LNG project reports

MANILA, Philippines — The Department of Energy (DOE) has directed First Gen Corp. to complete additional requirements for its amended liquefied natural gas (LNG) terminal project before proceeding to the construction phase.

Energy Secretary Alfonso Cusi said the Lopez-led firm has revised its LNG terminal project in Batangas from an onshore facility to a floating storage and regassification unit (FSRU).

“They changed the concept from on shore terminal, now they’re going to go for an FSRU. So they submitted their amendments and that’s being addressed by our OIMB (Oil Industry Management Bureau),” he said.

The change in the plans required additional permits that First Gen needs to complete before a construction permit is issued by the agency, according to DOE-OIMB director Rino Abad.

“The change from onshore to offshore resulted in additional requirements for permitting,” he said. “We’re speaking about six additional permits because of the change, permits coming from DENR (Department of Environment and Natural Resources), PPA (Philippine Ports Authority), PCG (Philippine Coast Guard),” Abad said.

Apart from the technical aspect, First Gen also changed the project’s timeline after the DOE urged to fast-track the project.

Originally, First Gen said the FSRU project would introduce LNG to the Philippines as early as the third quarter of 2022.

Abad said the agency has told the Lopez firm to improve the timeline it first submitted.

“First Gen had a review on its project timeline because of the discussion that we should maximize the construction period,” he said.

From the original target of August 2022, the DOE director said the completion of First Gen’s FSRU project would be advanced to April of the same year.

“In fact, completion is January. But there’s a commissioning   testing period so the full commissioning of the FSRU is April 2022,” Abad said.

Once First Gen completes the additional requirements, the DOE-OIMB will endorse the project for approval of the DOE secretary.

“These are the reasons why we haven’t submitted their project for recommendation to the secretary for the approval of the permit to construct. They still have submissions that we need to include in our recommendation to the secretary,” Abad said.

Cusi, meanwhile, assured that the DOE is ready to address the application of First Gen.

First Gen’s LNG project, in partnership with Tokyo Gas, was originally an onshore facility targeted for completion in 2024. It was eyed to have a capacity to process five mpta of LNG, and require investment of around $1 billion.

However, it revised plans to add an FSRU to be able to bring in LNG earlier.

An FSRU is a LNG carrier that is capable of storing LNG and which has an onboard regasification plant capable of returning LNG into a gaseous state and then supplying it directly into the gas network.

Last March, First Gen’s subsidiary FGEN LNG Corp. submitted to the DOE an application for a permit to construct, expand, rehabilitate and modify (PCERM) for the project.

The Lopez firm has earmarked around $300 million for the FSRU project, of which $60 million was spent this year, $110 million was set for 2021 and the remainder to be disbursed over a two- to three-year period, which is contingent on receiving the permit to construct from the DOE, First Gen president and COO Giles Puno said earlier.

First Gen is the largest company in the country that provides only clean and renewable power. In 2016, it declared that it would not develop, finance, or operate any coal fired power plants.

It owns and operates 30 power plants across Luzon, Visayas, and Mindanao with 3,492 megawatts (MW) of installed capacity, powering 21.0 percent of the Philippines’ gross generation as of end-2019.