By Lenie Lectura- May 29, 2019
STA. RITA, Batangas—First Gen Corp.
wants to start construction of two new gas-fired power plants as early as next
year and finish it by 2023, just in time for when the Lopez-led firm would have
put up its liquefied natural gas (LNG) terminal within the First Gen Clean Energy
Complex.
First Gen EVP and Chief Commercial
Officer Jonathan Russell said after the groundbreaking ceremony of its LNG
terminal project that two gas plants will have a combined capacity of 1,200
megawatts (MW).
“Next to the San Gabriel site, we
have two additonal vacant lots which can take two new units…about 1,200 MW,”
Russell said.
Ideally, construction for the two
gas plants must be finished in 2023.
“There’s a need for new capacity by
2024 so we’d like to start construction of those soon so that they can start to
deliver power using LNG by 2024. We need to build them by 2023 so we can
start them in 2020,” he said.
But a final investment decision
(FID) has yet to be reached concerning the two new plants.
“We haven’t taken a final investment
decision yet because we haven’t decided which contractor to choose,” Russell
added.
First Gen already operates four
gas-fed power plants with an aggregate capacity of about 2,000 MW. These are
the 1,000-MW Santa Rita, 500-MW San Lorenzo, 414-MW San Gabriel and 97-MW
Avion.
On Tuesday morning, First Gen broke
ground for its $700-million to $1-billion LNG import terminal.
The project will be developed in two
phases. The first includes new unloading facilities for LNG carriers with
capacities ranging from 40,000 to 177,000 cubic meters; a 200,000-cubic meter
LNG storage tank with a maximum send-out capacity of up to 5 metric tons per
annum (MTPA); two LNG truck loading bays; as well as provisions for a future
LNG carrier loading system for vessel capacities ranging from 5,000 to 40,000
cubic meters.
The second phase includes an
additional 200,000 cubic meters; LNG storage tank; increasing its send-out
capacity up to 7 MTPA; two additional LNG truck loading bays; and an LNG
carrier reloading system.
The company is targeting to finish
the LNG terminal before gas from the Malampaya gas facility runs out in 2024.
When he delivered his speech during the ceremony, Energy Secretary Alfonso Cusi
said he hopes First Gen will be able to finish construction during the Duterte
administration.
“I think that might be a little
challenging,” said Russell when asked if the LNG facility can be put up in 2022
“because we don’t need the LNG until the Malampaya finishes. We want to
get it finished before Malampaya expires. We are hoping to get the project
finished in 2023, but we certainly want to start it before the end of the
term,” he said.
First Gen will tap lenders to
complete the financing of the LNG project.
“We’re in discussions with several
financing institutions. In the long term, we hope we can take out project
financing. It could be 60 percent to 70 percent financed. We need to get
on this with this project. If we don’t start to move, the risk is that 3.2 GW
of capacity just disappears from the grid because of no gas. So there’s a real
imperative to get moving. We need to work with partners to help make that
happen,” Russell added.
First Gen has partnered with Tokyo
Gas Co. Ltd. for the LNG project. Both signed a joint development
agreement (JDA) in December last year.
“Given the joint development
agreement between Tokyo Gas and First Gen, we consider that the holding of a
Kagami Biraki ceremony is an appropriate way for First Gen and Tokyo Gas to
celebrate our collaboration, the completion of the significant predevelopment
work, and the commencement of the next phase of the development of the
project,” said Federico R. Lopez, chairman and CEO of First Gen.
First Gen is still on the lookout
for interested firms willing to join the project. Discussions with potential
partners are still ongoing.
Once completed, the LNG terminal
will allow the country to import LNG and ensure a continuing stable supply of
clean energy once the Malampaya gas field is depleted. The entry of LNG
will encourage both industrial and transport industries to consider it as a
replacement to more costly and polluting fuels.
“This groundbreaking is putting the
Philippines in the value chain of LNG,” Cusi said.
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