First Gen allots $530M capex for expansion

 Published May 19, 2021, 2:33 PM by Myrna M. Velasco

https://mb.com.ph/2021/05/19/first-gen-allots-530m-capex-for-expansion/

 

Lopez-led First Gen Corporation has earmarked US$530 million capital expenditures (capex) this year that will be funneled mainly to the expansion projects of subsidiary Energy Development Corporation (EDC) as well as its ongoing interim liquefied natural gas (LNG) import terminal.

During the company’s annual stockholders’ meeting, First Gen Chief Finance Officer Emmanuel P. Singson stated that “EDC is targeting a higher capex this year and is planning to spend US$280 million to catch up on its drilling and investments, as the Covid-19 pandemic resulted in the postponement of key activities last year.”

The EDC projects being advanced this year will include binary growth facilities – primarily its 3.6-megawatt Mindanao-3 and the 29MW Palayan Bayan project.

For the company’s LNG import terminal, the capital spend this year had been set at heftier US$120 million because the project’s construction will already commence. This facility will reach commercial operation by third quarter next year.

The other project in the company’s line-up this year is its 100-megawatt Aya pumped storage hydropower project that will command capital outlay of US$60 million.

On the firm’s LNG facility, First Gen EVP and Chief Commercial Officer Jonathan C. Russell indicated that they are in continuous discussion “with a wide range of potential suppliers for LNG procurement,” with him qualifying that “there is a great deal of interest in the Philippines as a new market for LNG.”

He expounded that “recent changes in the LNG market means that there are now considerably more options for a new buyer of LNG…we are seeking a supplier of LNG that can offer cost-competitive and flexible terms to support the development of renewables.”

In terms of market expansion for gas in the country, Russell asserted that they are looking at greenfield large and small-scale gas plants that are due for developments; as well as exploring “new ways of delivering gas to customers using small-scale LNG by road and by sea instead of traditional gas pipelines.”

The First Gen executive added “given that Malampaya is insufficient and appears to be declining more quickly than anticipated, the completion of the interim LNG terminal next year, is very timely.” First Gen’s LNG import facility will have production capability of 500 million standard cubic feet per day; and this will be more than enough to replace Malampaya’s fuel capacity void.

Relative to the company’s planned power project expansion of 1,200MW capacity via the proposed Santa Maria gas-fed facility, First President and COO Francis Giles B. Puno stipulated that they already “pre-invested in certain common infrastructure and currently, we are carrying out pre-development works and securing permits for the project.”

He specified that “the development of the FGEN LNG terminal paves the way to proceed with the Santa Maria project, which if needed, could be online by late 2024 or early 2025.” On the Lake Aya project, this is envisioned as a “pioneering variable-speed pumped storage facility.” At this stage, preliminary assessment and feasibility had already been completed for that venture.