MANILA, Philippines — Lopez-led First Gen Corp. is pushing back the procurement of its fifth shipment of liquefied natural gas (LNG) while it awaits regulatory approvals for the recovery of costs associated with LNG operations.
“We’re rethinking (the purchase plan) because we still have gas supplies. The July delivery (of the LNG cargo) will be deferred,” First Gen president and COO Francis Giles Puno told reporters last Friday.
The company last month awarded a contract to TG Global Trading Co., a unit of Tokyo Gas Co. Ltd., for the supply of one LNG cargo of about 125,000 cubic meters to First Gen Singapore Pte. Ltd.
The LNG cargo was supposed to be unloaded this month into the storage tanks of the BW Batangas floating storage and regasification unit (FSRU), currently berthed at the First Gen Clean Energy Complex.
An FSRU is a specialized vessel used to import, store and regasify LNG.
Puno did not provide details on the deferred time frame but said the company would move forward with the plan once fully prepared.
“Right now, we’re going through the operation. The Malampaya (gas field) is there, and we still have the residual gas. So we have to deplete the residual gas,” he noted.
The Malampaya deep water gas-to-power project, operated by Prime Energy Resources Development of tycoon Enrique Razon Jr., is the country’s first and only indigenous gas resource in offshore Palawan.
First Gen’s four natural gas-fired power plants with a combined capacity of 2,017 megawatts (MW) have been supplied with Malampaya gas for several years.
“We’re producing gas as much as we can, but in the meantime, Malampaya gas is being mixed with LNG,” Puno explained.
The executive also said that First Gen is seeking approvals with the Energy Regulatory Commission (ERC) and the Department of Energy to recover the costs for LNG operations.
“We don’t just import LNG and immediately convert it into electricity. It needs to be regasified; that’s why there’s an FSRU. That’s what we’re clarifying with the ERC,” Puno said.
The company received its first LNG cargo delivery at Subic in August 2023 and completed subsequent deliveries of LNG cargoes in its Batangas complex in December 2023 as well as in February and May 2024.
First Gen, through subsidiary FGen LNG Corp., owns and operates the interim offshore terminal project in Batangas City, the construction of which was aimed at ensuring fuel for natural gas plants.
It has entered into a five-year agreement for the charter of the BW Batangas, which will provide FSRU services as part of the project.
This year, First Gen has allocated a capital expenditure budget of $1.27 billion to continue beefing up its renewable energy (RE) and natural gas portfolio.
Through RE unit Energy Development Corp., the company is investing around P29.3 billion to develop and commercialize four geothermal and three battery energy storage system projects by the end of 2024.
Upon completion, First Gen’s total installed generation capacity from RE and natural gas plants will reach 3,722 MW.
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