Tokyo Gas affirms LNG partnership talks with First Gen

LISBON, Portugal – Partnership talks with Filipino firm First Gen Corporation had been affirmed by Tokyo Gas Co. Ltd. on planned liquefied natural gas (LNG) investments in the Philippines.

In an interview here on the sidelines of the recently concluded World LNG Summit,

Tokyo Gas Executive Director Kunio Nohata said “we are talking with them (First Gen),” albeit he qualified that discussions had not been really exclusive with the Lopez firm.

He added “we have a lot of discussions with potential partners in the Philippines.” Notably, the Japanese firm just recently handed letter of intent (LOI) also to Philippine Energy Secretary Alfonso G. Cusi on its proposed LNG investment plunge in the country.

First Gen initially targeted to tap a partner for its LNG import terminal venture as early as 2016, but from that time on, it has been continuing to weigh its options.

The Lopez firm has penciled in $1.0-billion capital outlay for its planned onshore LNG import terminal, that it has been eyeing to be on stream prior to the contract lapse of the Malampaya gas field in 2024.

More than a year back, First Gen executives indicated that they have at least eight groups in their ‘partner selection shortlist,’ reportedly a mixed bag of Japanese and European investors.

Then the company also shifted its attention for a time to state-run Philippine National Oil Company (PNOC) as prospective partner, but talks reportedly soured because they cannot agree on the ‘banked gas equitization preference’ of the government firm.

First Gen noted that it could offer up to 40-percent stake to its prospective partners, although it still wishes to corner controlling interest in the projects.

The company is currently the country’s biggest player in the nascent gas sector, and is seen flourishing even in the industry’s investment reset that may be bannered by LNG infrastructure facilities.

On blueprint, First Gen’s plan is for 5.0 million tons per annum (mtpa) of LNG onshore import terminal that would then be enough to underpin the capacity needs of its existing power plants as well as expansion ventures.

After its Avion and San Gabriel power plants of more than 500MW capacity, First Gen will still push for its next round of power development venture via the proposed 414-megawatt Sta Maria project.

The terminal of the LNG import facility could also cater to the needs of other players in the industry, according to company executives.