DOE now offers ‘comm’l license’ to First Gen LNG project

Published December 16, 2018, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/12/16/doe-now-offers-comml-license-to-first-gen-lng-project/

The Department of Energy (DOE) makes a swift turnaround on the planned $1-billion onshore liquefied natural gas (LNG) terminal project of First Gen Corporation – with the government now willing to extend a “commercial license” for the Lopez firm’s gas import facility.

Energy Undersecretary Donato D. Marcos has indicated this to the media, stressing that “we will give them a notice to proceed… and they can operate on commercial basis,” meaning, they can offer LNG to other end-users.

The energy department initially sounded off that it will allow the First Gen facility on “own use basis” – but that shifted into giving them permit to operate a commercial LNG facility.

Own-use would mean the LNG import facility should cater only to the affiliated power plants of the Lopez group – such as the 1,000-megawatt Santa Rita, 500MW San Lorenzo, 414MW San Gabriel and 97MW Avion gas-fired generating assets.

The energy official qualified though that First Gen has not yet filed any application with the DOE for the proposed LNG facility.

Marcos added the First Gen LNG import terminal can be in competition with the other gas import terminal presumptively awarded to Tanglawan LNG Philippines, Inc. of businessman Dennis Uy and China National Offshore Oil Corporation.

“We will no longer issue an own-use permit, so we can give them (First Gen) notice-to-proceed for commercial purposes… they can sell to other end-users,” Marcos stressed.

First Gen just recently inked a joint development agreement with Tokyo Gas Co. Ltd. on the proposed LNG facility – with the Japanese firm cornering 20 percent equity in the joint venture.

The Lopez firm, according to industry sources, is still scouting for 2-3 more firms to join the JV deal – and one of the firms that had shown interest to be part of the consortium is US firm Cheniere Energy, Inc.

The LNG terminal cast on blueprint by the Lopez group will have capacity of 5.0 million tons per annum and it will be sited proximate to its power plants in Batangas.

The company has already completed the front-end engineering design (FEED) for the project and will work next on the selection of its engineering, procurement and construction (EPC) contractor.