First Gen Corp. of the Lopez Group plans to temporarily defer the delivery of its fifth liquefied natural gas (LNG) cargo scheduled this month with the availability of the indigenous Malampaya natural gas, a top executive said over the weekend.
First Gen awarded last month a contract to TG Global Trading Co. (Tokyo Gas) for the supply of one LNG cargo equivalent to 125,000 cubic meters to be delivered in July to its wholly-owned subsidiary First Gen Singapore Pte. Ltd (FGEN Singapore), following a competitive international tender.
“Right now, we’re going through the operations, and Malampaya is still there. Basically, we have to defer to a time that we are ready,” First Gen president and chief operating officer Francis Giles Puno said.
Puno said they have yet to schedule the fifth LNG delivery as it would depend on the dispatch of the natural gas power plants in the Wholesale Electricity Spot Market, the trading floor of electricity.
He said First Gen swas also waiting for clearance from the Energy Regulatory Commission and the Department of Energy on the company’s “ability to recover the cost for the operations of the LNG.”
“We are still discussing with ERC. Because they are used to liquid fuel, they are used to Malampaya but for LNG, we are still trying to educate them about the LNG system….You still have to gassify it,” Puno said.
Puno said there are other costs to recovery aside from the cost of imported fuel, such as jettyand regasification, expenses.
First Gen’s fifth LNG cargo is supposed to be delivered by an LNG carrier and unloaded into the storage tanks of the BW Batangas floating storage and regasification unit (FSRU) berthed at the First Gen Clean Energy Complex (FGCEC) in Batangas City.
The LNG will power FGEN’s existing gas-fired power plants which are also located in the FGCEC.
FGEN has a portfolio of four existing gas-fired power plants with a combined capacity of 2,017 megawatts that have been supplied for many years by the Malampaya natural gas field in Palawan.
Other First Gen’s previous suppliers are CNOOC Gas and Power Trading & Marketing Ltd., Shell Eastern LNG, Trafigura, TotalEnergies Gas and Power Asia Private Ltd.
FGEN LNG constructed its interim offshore LNG terminal and executed a five-year time charter party for BW Batangas to provide LNG storage and regasification services.
FGEN teamed up with Tokyo Gas for the IOT terminal, with FGEN LNG Holdings owning 80-percent shareholding and Tokyo Gas with 20 percent, once finalized.
FGEN executives earlier said they were looking at expanding their LNG partnership to include gas procurement and the possibility of building new terminals.
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