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FGEN LNG receives permit for offshore LNG terminal

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LNG Industry,

FGEN LNG Corporation, a wholly-owned subsidiary of First Gen Corporation, has received a permit to construct, expand, rehabilitate, and modify (PCERM) from the Department of Energy (DOE) in respect of its application for the construction of an interim offshore LNG terminal located in the First Gen Clean Energy complex in Batangas City.

The PCERM was issued in response to the application submitted by FGEN LNG to the DOE on 4 March 2020.

The project consists of construction works necessary to: i) modify the existing jetty that will enable it to become a multi-purpose jetty; and ii) build an adjunct onshore gas receiving facility. The project represents the initial phase of the FGEN Batangas LNG terminal that was previously declared by the Energy Investment Coordinating Council through the DOE as an ‘energy project of national significance’ under Executive Order No. 30.

A PCERM is a permit issued by the DOE under the Philippine Downstream Natural Gas Regulation that authorises the construction of a Downstream Natural Gas Facility such as an LNG terminal. The PCERM received by FGEN LNG authorises FGEN LNG to construct the project.

“We are thankful to Secretary Cusi, and to the Downstream Natural Gas Review and Evaluation Committee of the DOE, for the support and guidance that they have provided during the evaluation process, especially given the difficult circumstances created by the COVID-19 pandemic, and for issuing the PCERM”, said Jonathan C. Russell, Executive Vice President and Chief Commercial Officer (CCO) of First Gen.

Once FGEN LNG’s preparations for the commencement of construction of the project are complete, including the design and implementation of enhanced work and safety protocols and procedures required to minimise the impact of COVID-19 on construction personnel and the local community. The construction phase of the project may begin by the end of 3Q20 or early 4Q20.

In parallel, FGEN LNG is preparing to issue a binding invitation to tender for a floating storage and regasification unit (FSRU) upon completion of its ongoing non-binding process. Three experienced FSRU providers, BW Gas Limited, GasLog LNG Services Ltd., and Hoegh LNG Asia Pte Ltd., have expressed interest in providing the FSRU that will provide LNG storage and regasification services to the project once constructed.

The project will allow FGEN LNG to accelerate its ability to introduce LNG to the Philippines as early as 3Q22, to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN LNG affiliates.

FGEN LNG believes the project will play a critical role in ensuring the energy security of the Luzon Grid and the Philippines, particularly as the indigenous Malampaya gas resource is expected to be less reliable in producing and providing sufficient fuel supply for the country’s existing gas-fired power plants, and even less so for additional gas-fired power plants. The entry of LNG will encourage new power plant developments, as well as industrial and transport industries, to consider it as a replacement to more costly and polluting fuels.

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