First Gen readies tsunami-resilient LNG facility

by Myrna Velasco May 15, 2016 (updated)

http://www.mb.com.ph/first-gen-readies-tsunami-resilient-lng-facility/

Lopez-led First Gen Corporation is now at the thick of site preparation for the planned $1-billion liquefied natural gas (LNG) import terminal claimed to be a tsunami-resilient installation.

Francis Giles B. Puno, First Gen president said the company will spend $30 million this year for pre-development works at their LNG site and a relevant component of that is setting the facility for proposed degree of elevation.

“We’re preparing the site itself because it needs to be elevated, so if there’s a tsunami, the LNG facility will have safety buffer,” Puno said.

This is a heedful lesson of the March 2011 tsunami that hit Japan and adversely affected some of its energy facilities – primarily the Fukushima Dai-ichi nuclear plant and an oil refinery.

Puno added that based on the outcome of their consigned feasibility study, the LNG handling facility “should be elevated by about four meters. We will spend some amount to fill the area adequately and to allow it also for some time to settle.”

As to bringing the project to fruition and eventual completion, the target of the Lopez group would still be 2021 to 2022, strategically timed at the lapse of the gas sale and purchase agreements (GSPAs) and the decline of production or depletion of the Malampaya gas field.

“If you look at LNG, the timing is 2021-2022. But when you look at Malampaya depletion, we’re looking at 2022 to 2024. Right now, we’re looking at tail-end of 2021 to sometime 2022,” Puno said.

Following extensive site preparation, the next steps for the company’s LNG venture would be tapping the engineering, procurement and construction (EPC) contractor and selection of joint venture partners.

“That’s ongoing. What we intend to do is announce and we want to finalize the partnership arrangement this year,” he said.

Puno emphasized that while they currently have a shortlist of prospective partners – generally dominated by foreign companies – their final choice will not necessarily be limited to them

“We have a shortlist and these are foreign players… nevertheless, I don’t want to tell the others not in our list that they are not welcome to visit or talk to us anymore – because what if they have better offers,” he said.

The other matter that they would be conspicuously working on will be seeking government’s imprimatur on the gas industry’s framework of regulation.

“We also need government in terms of regulation. There’s not a lot of in-depth talk, but it has to be considered,” he said.

Puno has emphasized the development track being manifested here is that investments on LNG terminal can really be done by a private sector company.

“We just need government support. For example in regulation, will it be any different from a utility the way it is regulated? In other oil and gas markets, the return on investment (for LNG) is not really regulated, so it could be an open season for everybody, except for the gas pipeline,” he opined.