First Gen awards LNG contract to Shell Eastern

MANILA, Philippines — Lopez-led First Gen Corp. has awarded the contract for the initial shipment of the company’s liquefied natural gas (LNG) supply requirement to Shell Eastern Trading (Pte.) Ltd.

The award of the contract comes following a successful international tender that was issued by First Gen last month.

Under the contract, Shell Eastern LNG will supply one LNG cargo of approximately 154,500 cubic meters from Aug. 1 to Sept. 30 on a delivered ex-ship basis to First Gen wholly owned subsidiary, First Gen Singapore Pte. Ltd.

First Gen said the LNG cargo would be delivered by an LNG carrier, which will facilitate the gassing-up and cooling-down of the BW Batangas floating storage regasification unit (FSRU), as well as the transfer the LNG cargo into the storage tanks on board the BW Batangas FSRU at Subic Bay.

The BW Batangas will then return to the FGEN LNG terminal in Batangas to complete commissioning activities, it said.

The LNG to be purchased by the company will subsequently be utilized by its existing gas-fired power plants in the First Gen Clean Energy Complex in Batangas City.

First Gen completed over the weekend the berthing of the BW Batangas FSRU at FGEN LNG Corp.’s interim offshore terminal project.

First Gen said BW Batangas is expected to remain in Batangas until it is required to depart for Subic Bay to collect the first LNG cargo that would be delivered by Shell Eastern LNG.

First Gen continues to build on the infrastructure that will allow the country to import enough LNG and assure the continued operations of the natural gas plants in the country.

FGEN LNG, a wholly owned subsidiary of First Gen, has constructed the LNG terminal in Batangas and executed a five-year time charter party for the charter of the BW Batangas, which will provide LNG storage and regasification services as part of the project.

The FGEN LNG terminal is expected to accelerate the ability to introduce LNG to the Philippines and will serve the natural gas requirements of existing and future gas-fired power plants of third parties and First Gen’s affiliates.

“First Gen believes the FGEN LNG Terminal will play a critical role in ensuring the energy security of the Luzon grid and the Philippines,” the company said.

First Gen has a portfolio of four existing gas-fired power plants with a combined capacity of 2,017 megawatts that have been supplied for many years with gas from the Malampaya field.

FGEN LNG earlier signed a memorandum of understanding with Enrique Razon’s Prime Infrastructure Capital Inc. for the proposed lease and operation of the FGEN LNG terminal.

While no definitive agreements have been signed, First Gen said FGEN LNG and Prime Infra continue to develop a gas aggregator framework of which the FGEN LNG terminal is a primary element.

The company said the gas aggregator framework is intended to make it possible to blend indigenous Malampaya gas with imported LNG to ensure a least-cost solution for consumers, enhance energy security, and provide a competitive power generation market.

This will be done while exploration activities leading to the commercial development of new indigenous natural gas fields are also undertaken.

“All of these activities are in response to the national government’s urgent call for significant investments to ensure national competitiveness,” First Gen said.

Prime Infra, for its part, said that together with First Gen, they are leading efforts to develop a gas aggregator framework that would bring order to the distribution of natural gas from the Malampaya field and those imported from other countries.

It said the gas aggregator framework would have the LNG facilities of First Gen as a major element.

Aside from establishing a resilient and efficient natural gas supply chain, Prime Infra president and CEO Guillaume Lucci said the gas aggregator framework would ensure a stable and sustainable baseload power supply.

“Providing an orderly system of natural gas distribution, through the gas aggregator proposal, will complement exploration activities leading to the commercial development of new indigenous natural gas fields,” Prime Infra said.