Philippines LNG Developer Falls Short on Approvals: Press

The Philippines department of energy (DOE) has asked Manila-listed First Gen to complete additional requirements for its proposed floating LNG storage and regasification unit (FSRU) before it can proceed to the construction phase, according to local media reports published on August 10.

“They changed the concept from on shore terminal, now they’re going to go for an FSRU. So, they submitted their amendments and that’s being addressed by our Oil Industry Management Bureau,” energy secretary Alfonso Cusi said.

The change in the plans required additional permits that First Gen needs to complete before a construction permit is issued by the agency, Philstar reported quoting DOE-OIMB director Rino Abad.

“The change from onshore to offshore resulted in additional requirements for permitting,” Abad said. “We’re speaking about six additional permits because of the change, permits coming from the Department of Environment and Natural Resources, the Philippine Ports Authority, and the Philippine Coast Guard.”

Earlier this year, First Gen’s wholly-owned subsidiary, Fgen LNG, filed the application for a permit to construct, expand, rehabilitate and modify (PCERM) its existing jetty with the department of energy. A PCERM is required by the Philippine Downstream Natural Gas Regulation.

Last month, First Gen shortlisted three companies to participate in a competitive selection process for the chartering of an FSRU for its Batangas project.

In December 2018, Japanese utility, Tokyo Gas, signed an agreement with First Gen to develop an LNG receiving terminal in the country. Tokyo Gas has a 20% stake in Fgen LNG. In September last year, First Gen picked Japan’s JGC Corporation for the engineering, procurement and construction work for the project.

Apart from the technical aspect, First Gen also changed the project’s timeline after the DOE urged to fast-track the project, Philstar reported. Originally, First Gen said the FSRU project would introduce LNG to the Philippines as early as the third quarter of 2022.

Abad said the agency has told the firm to improve the timeline it first submitted. “First Gen had a review on its project timeline because of the discussion that we should maximize the construction period,” he said.

From the original target of August 2022, the DOE director said the completion of First Gen’s FSRU project would be advanced to April of the same year.

First Gen has stated that the project, and the early entry of LNG, will play a critical role in ensuring the energy security of the Luzon grid and the Philippines. The offshore Malampaya gas field is declining and gas supplies for the country’s power plants are looking ever less reliable.

First Gen has about 2 GW generating capacity from four operating gas assets – the 1-GW Santa Rita plant, the 500-MW San Lorenzo plant, the 414-MW San Gabriel plant and the 97-MW Avion plant – all of which depend on Malampaya's gas, whose gas sales contract expires in 2024 as the field depletes. They are all at Batangas City.