First Gen to seek NTP extension for US$1-B LNG project

By Myrna M. Velasco – August 20, 2019 at 10:00 pm
from Manila Bulletin

Lopez-owned First Gen Corporation has indicated to the Department of Energy (DOE) that it will be seeking extension for the notice-to-proceed (NTP) of its US$1.0 billion liquefied natural gas (LNG) import terminal project.

First Gen logo

The company’s NTP will lapse this August, but under the Philippine Natural Gas Industry Rules, this could still be extended by another six months upon application with and approval by the DOE.

“They (First Gen executives) did manifest informally that they will be filing for extension –they will need more time to reach financial closing and final investment decision,” Energy Assistant Secretary Leonido Pulido III has disclosed.

He added that the NTPs granted to the proponent of LNG import facilities are just for duration of six months, but there is a leeway for extension of another six months.

After the end of the six-month extension, he noted that the expected milestones from the project sponsor will be final investment decision (FID) and financial closing.

Following that process, Pulido emphasized that the next step will be for the project to move to construction phase and that will require another round of securing permit from the department.

“After the end of the six-month extension and having FID, they need to submit application for construction which is almost automatic,” the energy official explained.

First Gen already broke ground on its propounded onshore LNG import terminal venture in May this year – but it manifested that FID will be reached by yearend up to early part of 2020 yet.

The company has been scouting for other partners that will share in equity investment in the project – on top of the 20-percent stake already cornered last year by Tokyo Gas Co. Ltd.

The FID announcement, according to company executives, will coincide with the firming up of new joint development agreements (JDAs) with other targeted partners – which are also likely deep-pocketed global players in the LNG sector.

Beyond the import terminal, First Gen has also been casting two greenfield power projects that will have aggregate capacity of 1,200 megawatts via its blueprinted Santa Maria and Saint Joseph power projects.

The targeted timeline of completion of the new power facilities will be in 2024; and these capacities are now being offered in the competitive selection process (CSP) for greenfield capacity of power utility giant Manila Electric Company.