First Gen to expand gas market to Vis-Min

By Myrna M.Velasco – June 30, 2019, 10:00 PM
from Manila Bulletin

SINGAPORE – Lopez-owned firm First Gen Corporation will be expanding the country’s liquefied natural gas (LNG) market not just in the Luzon grid, but all the way to end-users in Visayas and Mindanao.

First Gen logo

In an interview on the sidelines of the CWC Asia Pacific LNG Summit here, First Gen Executive Vice President and Chief Commercial Officer Jon Russell indicated that the targeted market expansion could start with smaller end-users in the two other islands – those opting to shift fuel use of their electricity supply.

“What we’d like to do is take small-scale LNG and bring it to Visayas and Mindanao and allow smaller users, for example, smaller power plants. If they’re thinking of using diesel as a choice, instead of using diesel, let’s replace it with LNG,” he said.

The First Gen executive expounded “the small-scale is really exciting because up to this point, there’s only one island – out of 7,107; Luzon is the only island that has the benefit. Then we can have a cleaner, cheaper fuel – and that could be a basis for industrial customers to also use LNG.”

The transport of gas to Visayas and Mindanao as well as targeted expansion in Luzon, he explained, can be done two-pronged: One could be via road tankers; and through small ships to bring LNG to the two major islands.

Russell further noted the company will put up LNG distribution infrastructure support in the blueprinted $1.0-billion LNG import facility in Batangas. That project, currently being advanced via a partnership with Tokyo Gas Co. Ltd., is under the corporate vehicle FGen LNG Corporation.

“In the terminal, we’re making provisions for two things. First is, road tankers that can take LNG in Luzon between Batangas and Manila. But then also, we’ll have a ship loading facility for smaller ships right on the site and then we would be able to transport LNG via smaller ships to the islands – to the Visayas and Mindanao,” he explained.

Russell emphasized that catering to smaller end-users could start with 1,000 cubic meter-vessels; while adding that “the actual logistics, we need to work on it – so that’s where we’re starting to focus on right now.”

Essentially, the company’s strategy is not just to satiate the gas needs of power plant facilities, but also to broaden gas technology’s market base to industrial end-users all over the country.

“The main thing and first is: we need to bring in LNG, but we’re looking at this (market expansion in other grids) because this could happen in parallel, and it’s really quite exciting,” Russell noted.

Executives of the Lopez firm were in Singapore last week and had been wrapped up in series of meetings with prospective LNG suppliers and other key players in the global gas sector.

“We’ve got a great deal of interest from suppliers here, they’re really keen to get involved in a new market. All of the big players in LNG we’ve been speaking to and they’re really keen on the Philippines,” Russell said.

The LNG terminal project of the First Gen-Tokyo Gas tandem is targeting to achieve final investment decision (FID) toward the end of this year to early 2020; and due to reach commercial operation in 2023.