First Gen Corp. allocates P14.5 billion for LNG projects

by Lenie Lectura, 06 March 2015
from BusinessMirror

FIRST Gen Corp. (FGC) announced on Friday it is allocating roughly P14.5 billion to beef up its liquefied natural gas (LNG) projects.

A statement from the company said FGC’s board approved, among others, the appropriation of P14.5 billion as investment in LNG.

The Lopez-led company, however, scrimped on details of the allocation.

LNG is natural gas that has been converted into a liquid state for easier storage and transportation. Upon reaching its destination, LNG is “re-gasified” so it can be distributed through pipelines as natural gas.

FGC is developing the 100-megawatt (MW) Avion Open Cycle Natural Gas-Fired power plant in Batangas. The company targets to start operations by April 2015.

The Avion facility will be located adjacent to FGC’s 1,000-MW Santa Rita and 500-MW San Lorenzo natural gas-fired power plants in Batangas City.

FGC President Francis Giles Puno, who was present during a summit on natural gas on March 6, said the company is “more focused on Avion, which is about $130 million, and San Gabriel, which is $600 million to $700 million.”

“So it’s about $800 million to $900 million of capex [capital expenditure],” Puno said.

Meanwhile, the San Gabriel natural-gas power plant is envisioned to be the most efficient gas-fired power plant in Southeast Asia with an efficiency of more than 60 percent.

FGC’s San Gabriel will initially run on natural gas produced from the Malampaya field off southwestern Palawan province, which is operated by a consortium led by Shell Philippines Exploration B.V.

The firm’s two other plants powered by Malampaya gas—Santa Rita and San Lorenzo in Batangas City—generate a combined 1,500 MW.

“Our current gas-supply contracts from Malampaya will expire in about 10 years’ time, so we are already preparing for a post-Malampaya gas world to provide replacement fuel for our new and existing power plants,” Puno said.

The Malampaya natural gas generates 2,700 MW, which accounts for about 40 percent of Luzon’s power requirements. The government has said that Malampaya’s output may run out by 2024.

FGC will also expand San Gabriel by another 414 MW more.

“Avion will, hopefully, run by June this year, while San Gabriel by March next year. Santa Maria, an expansion of San Gabriel, will probably be put up in the second half of 2017 or early 2018,” Puno added.

The company also plans to put up a $1-billion LNG import terminal and have this running by end of 2019.

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