First Gen Picks Japan's JGC for Philippines LNG Terminal EPC Work

Manila-listed First Gen Corporation has selected Japan’s JGC Corporation for the engineering, procurement and construction (EPC) work for its Batangas LNG terminal project, it said in a stock exchange filing September 2.

The project is being developed by First Gen through its wholly-owned subsidiary, FGEN LNG Corporation. “This marks the conclusion of an extensive EPC tendering phase which commenced in 2014, during which around 22 companies were invited and 18 expressed an interest to participate in the tender process and work on the project,” it said.

Last year, Japanese utility, Tokyo Gas, signed an agreement with the Philippines' biggest independent gas-fired power plant operator to develop an LNG receiving terminal. Tokyo Gas has a 20% participating interest in FGEN LNG Corporation.

First Gen has about 2 GW in operating gas assets composed of four gas-fired power plants – 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 operate on Malampaya gas supply.

First Gen said FGEN and JGC would complete a detailed study focusing on modifications that can be made to FGEN’s existing jetty that would allow it to receive large and small-scale LNG vessels and to continue to receive liquid fuel. Following completion of this study, FGEN would then look to commence construction of the modified jetty as soon as possible, First Gen added. In May this year the company held the ground breaking ceremony for the receiving terminal and said it has completed “significant” pre-development work in Batangas City. 

“A major benefit of completing this work early would be that as soon as the jetty modifications are completed, FGEN will be able to bring in a floating storage regasification unit (FSRU) on an interim basis. This will allow FGEN to receive LNG as early as 2021, even prior to the expiration of the Malampaya gas contracts in 2024,” First Gen said.

FGEN believes 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, particularly as the indigenous Malampaya gas resource runs out in the next five or six years.