DOE issues notice-to-proceed for US firm’s FSRU project

The Department of Energy (DOE) has finally approved the notice-to-proceed (NTP) for the propounded floating storage regasification unit (FSRU) of American firm Excelerate Energy L.P., which will likely command an investment of US$250 million.

Based on the submitted work program of the Texas-headquartered company, the construction of the FSRU facility will start October this year until June 2021 or within a stretch of two years.

Upon completion of the facility as targeted third quarter of 2021, its prospective market will be the gas fleet expansion of SMC Global Power Holdings of the San Miguel group.

As stipulated with the energy department, the diversifying conglomerate is eyeing to lean on gas supply sourcing from the FSRU for its expanded gas-fed generating assets of aggregate 1,800 megawatts (MW).

The site of the FSRU installation will be proximate to the existing 1,200MW Ilijan gas-fired power plant in Batangas. The power plant itself is anticipated to be turned over to the San Miguel group in 2022, following the conclusion of its independent power producer administrator (IPPA) contract with state-run Power Sector Assets and Liabilities Management Corporation.

According to the DOE, the FSRU installation of Excelerate Energy “will have a storage capacity of 150,000 cubic-meters, to be located at about 9.5 kilometers offshore in the Bay of Batangas.”

On the project timeline set out by the US firm, Energy Secretary Alfonso G. Cusi indicated that “by the third quarter of 2021, we are expecting that Excelerate’s FSRU LNG facility will commercially operate.”

The energy chief noted that the slew of approvals granted on LNG storage facilities had been anchored on the anticipated gas production decline; then the eventual depletion of the Malampaya field.

Relative to the NTP, the project proponent is required to comply with the conditions precedent within the prescribed six months prior to advancing into construction phase.

Such shall include the submission of permits from various government agencies as well as endorsements from relevant local government units.

And at the stage where it already concluded financial closing, it will need to submit proof of such to the energy department.

Once that is accomplished, the DOE shall subsequently issue the permit-to-construct (PTC) that will then authorize the actual construction of the facility.

On the gas offtake agreement, the energy department indicated that the power generation investment arm of the San Miguel group already “expressed interest to be the target power customer of Excelerate.”

By January 2022, SMC Global Power laid down that it will be requiring new round of gas supply to satiate its requirements over 15 years.