First Gen to start building LNG terminal in Batangas

First Gen Corp. of the Lopez Group is set to start the construction of its LNG (liquefied natural gas) terminal in Batangas City following the Department of Energy’s (DOE) issuance of a permit.

Its wholly- owned subsidiary, FGEN LNG Corp. (FGEN LNG), received last September 23 a Permit to Construct, Expand, Rehabilitate and Modify (PCERM) for the construction of an Interim Offshore LNG Terminal in the First Gen Clean Energy Complex in Batangas City.

The company applied for a permit in March.

A PCERM is a permit issued by the DOE under the Philippine Downstream Natural Gas Regulation that authorizes the construction of a Downstream Natural Gas Facility such as an LNG Terminal. The PCERM received by FGEN LNG authorizes FGEN LNG to construct the project. Construction may begin by the end of September or early fourth quarter once preparations are complete, including the design and implementation of enhanced work and safety protocols and procedures required to minimize the impact of Covid-19 on construction personnel and the local community.

The LNG project includes the modification of an existing jetty that will enable it to become a multipurpose jetty and construction of an adjunct onshore gas receiving facility.

First Gen said these represent the initial phase of the FGEN Batangas LNG Terminal.

FGEN LNG is also preparing to issue a binding invitation to tender for a Floating Storage and Regasification Unit (FSRU) upon completion of its ongoing non-binding process. Three experienced FSRU providers, BW Gas Limited, Gaslog LNG Services Ltd., and Hoegh LNG Asia Pte Ltd., have expressed interest in providing the FSRU that will provide LNG storage and regasification services to the project once constructed.

The project was previously declared by the Energy Investment Coordinating Council through the DOE as an “Energy Project of National Significance” under Executive Order 30.

“We are thankful to Secretary Cusi, and to the Downstream Natural Gas Review and Evaluation Committee of the DOE, for the support and guidance that they have provided during the evaluation process, especially given the difficult circumstances created by the Covid-19 pandemic, and for issuing the PCERM,” said Jonathan C. Russell, Executive Vice President and Chief Commercial Officer of First Gen.

The said project will allow FGEN LNG to accelerate its ability to introduce LNG to the Philippines as early as third quarter of next year, to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN LNG affiliates.

FGEN LNG believes the project will play a critical role in ensuring the energy security of the Luzon Grid and the Philippines, particularly as the indigenous Malampaya gas resource is expected to be less reliable in producing and providing sufficient fuel supply for the country’s existing gasfired power plants, and even less so for additional gas-fired power plants.

The entry of LNG is expected to encourage new power plant developments, as well as industrial and transport industries, to consider it as a replacement to more costly and polluting fuels.