First Philippine : Gen takes shipment of imported LNG, eyes second

LOPEZ-led First Gen Corp. received the first delivery of imported liquefied natural gas (LNG) last month, said its president, who is now considering a second shipment.

"We've already imported the first shipment of LNG. It is already here. It came last month," First Gen President and Chief Operating Officer Francis Giles B. Puno said in an interview on the sidelines of the Management Association of the Philippines' International CEO Conference in Taguig City on Tuesday.

He said the shipment was meant for the commissioning of the company's interim offshore LNG terminal project to ensure that "everything is working."

"It will be to make sure that the system is working. It also shows that the fuel works with respect to the existing power plants. What is happening is that we are running on Malampaya gas and then we also have to run on LNG, or a combination of the two. That is the important part - commissioning," he added.

In July, First Gen said an LNG carrier would be in charge of transporting 154,500 cubic meters of LNG as well as the gassing up and cooling down of the BW Batangas floating storage regasification unit (FSRU) at Subic Bay before the cargo's transfer into storage tanks on board.

The BW Batangas is the FSRU of First Gen unit FGEN LNG Corp. and BW LNG, its Norwegian partner. The vessel will provide LNG storage and regasification services to First Gen's current and planned gas-fired power plants and third-party terminal users.

After the LNG transfer into the storage tanks, the BW Batangas will then return to FGEN LNG's terminal in Batangas, thus completing the commissioning activities.

The imported LNG will be used to power First Gen's natural gas plants - San Lorenzo, San Gabriel, Santa Rita and Avion - with a combined capacity of 2,017 megawatts.

The four gas-fired facilities, which supply a fifth of the country's power requirements, depend on the Malampaya gas field situated offshore northwest Palawan, which has seen dwindling supply in the past few years.

LNG is touted as a solution to the country's power needs amid a looming power crisis with the expected depletion of the Malampaya field, the country's only indigenous source of natural gas.

According to Mr. Puno, First Gen has yet to secure a long-term contract for imported LNG supply.

"None yet. At least, the international suppliers will be aware of First Gen," he said.

Mr. Puno added that there is no timetable yet for securing a longer-term commitment, which he said would provide "cheaper power for consumers."

"We are seeking to address that issue, a long-term contract," he said.

"We already bought the first shipment. Likely, we will buy a second shipment as well. It is not yet a long-term arrangement," Mr. Puno said.

"The question is how we will transition from spot cargo to long-term. That will depend on the market if the market will accept the longer-term commitment," he added.

Meanwhile, Mr. Puno said there is no update yet on the previously announced collaboration between First Gen and Prime Infrastructure Holdings, Inc. to develop a gas aggregation framework.

"None yet. That is still a work in progress," he said.

In July, First Gen said the gas aggregation framework seeks to "make it possible to blend currently declining volumes of indigenous Malampaya gas with imported LNG" as well as complement ongoing commercial development of new indigenous natural gas fields."

On Tuesday, shares of First Gen dropped 14 centavos or 0.71% to close at P19.50 apiece.

https://www.bworldonline.com/corporate/2023/09/13/545199/first-gen-takes-first-shipment-of-imported-lng-eyes-second/