DOE grants EPNS status to First Gen’s LNG

By Lenie Lectura - August 9, 2019

https://businessmirror.com.ph/2019/08/09/doe-grants-epns-status-to-first-gens-lng/

THE LNG (liquefied natural gas) project of First Gen Corp. has been declared as an “Energy Project of National Significance” (EPNS) in accordance with Executive Order 30 (EO 30). 

FGEN LNG Corp. (FGEN LNG), a wholly owned subsidiary of First Gen Corp., said Thursday that its application for EPNS declaration filed in June has been approved by the Energy Investment Coordinating Council (EICC) through the Department of Energy (DOE). 

EPNS are significant energy projects for power generation, transmission and/or ancillary services including those required to maintain grid stability and security, and which are in consonance with the policy thrusts and specific goals of the DOE’s Philippine Energy Plan (PEP). 

FGEN LNG’s application for declaration was submitted on the basis that its LNG project will require the development of significant infrastructure and capital investment involving complex technical processes and engineering designs that will result in a substantial positive impact on the environment. 

The LNG hub will be built in the First Gen Clean Energy Complex (FGCEC) in Barangays Santa Clara, Santa Rita Aplaya and Bolbok, Batangas City, under the management and ownership of FGEN LNG. 

FGEN LNG has completed significant predevelopment work to make the project site “construction-ready.” It broke ground on its LNG hub, estimated to cost from $700 million to $1 billion, in May.

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 sendout 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-meter LNG storage tank, increasing its sendout capacity up to 7 MTPA; two additional LNG truck loading bays and an LNG carrier reloading system.

The company targets to finish the LNG terminal before gas from the Malampaya facility runs out in 2024. 

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.

The company said its LNG project will play a critical role in ensuring the energy security of the Philippines and the Luzon grid, particularly when the indigenous Malampaya gas resource no longer produces sufficient fuel for the country’s existing gas-fired power plants, and certainly not for additional gas-fired power plants. 

“We would like to sincerely thank the Department of Energy for approving our application for the FGEN Batangas LNG Terminal Project as an Energy Project of National Significance. 

“We believe that this project is crucial to ensure the continued operations of the 3.2-GW existing natural gas-fired plants given the expected reduction in gas supply from the Malampaya field up to the expiration of the contracts by 2024,” said Jonathan Russell, executive vice president and chief commercial officer of First Gen. 

He added: “First Gen will continue to work hard to ensure that this project will also be available to allow the development of new gas-fired capacity, with a lower carbon footprint that will support introduction of more intermittent renewables for the Philippines.”

First Gen has partnered with Tokyo Gas Co. Ltd.  for the LNG project. Both signed a joint development agreement (JDA) in December last year. 

The JDA is a preliminary agreement between the parties to jointly pursue development of FGEN LNG project with Tokyo Gas taking a 20-percent participating interest. 

It said the project is also consistent with both the DOE’s Nine Point Energy Agenda and PEP 2017-2040 as it promotes liquefied natural gas importation as an option to supplement and replace Malampaya gas.

FGEN LNG also received in March the formal approval of its application for a Notice to Proceed from the DOE, as defined in and required by the Philippine Downstream Natural Gas Regulation.