Philippine power producer taps Japan’s JGC for LNG terminal project

04, Sep. 2019

A gas-fired power plant operated by First Gen Corp. (Photo courtesy of First Gen)
A gas-fired power plant operated by First Gen Corp. (Photo courtesy of First Gen)

MANILA, NNA – First Gen Corp., a major power producer of the Philippine conglomerate Lopez Group, has picked major Japanese engineering firm JGC Corp. as its preferred engineering, procurement and construction (EPC) contractor for a planned billion-dollar liquefied natural gas terminal project.

The project is aimed at importing natural gas to supply to the Philippine utility’s four gas-fired plants in Batangas Province, south of Manila.

“We look forward to working with JGC to make this [project] a success,” Jonathan Russell, First Gen’s executive vice president, said in a statement.

Russell noted the LNG project is crucial to ensure the continuing operations of its existing 3.2 million kilowatts of natural gas-fired plants as the supply from the gas field is expected to decline before the expiration of the contracts with its operator in 2024.

JGC may look into the possibility of modifying its existing jetty that would enable the local utility to receive liquid fuel via a Floating Storage Regasification Unit (FSRU) on an interim basis, the statement said.

The floating unit is an LNG storage ship that has an onboard regasification plant capable of returning LNG back into a gaseous state, it said.

On the other hand, a JGC spokesman told NNA that EPC has yet to be finalized, saying it might be a “land-based only project” and does not include an FSRU. He also said it might take some time to obtain an official contract.

The Tokyo-listed company has engaged in a number of LNG plants and terminal projects in Southeast Asia, the Middle East and Russia among other regions.

First Gen, the Southeast Asian nation’s largest gas buyer, and Tokyo Gas Co., Japan’s largest gas utility, submitted the LNG terminal plan to the Department of Energy last December. Tokyo Gas plans to own a 20-percent stake in the project, which aims to commence operation in 2023.

In 2018, 39.9 percent of dependable electricity generation capacity in Luzon, the Philippines’ most populous island, came from coal and 21.9 percent from natural gas.

The Malampaya gas field is the only available resource of natural gas in the country. It is operated by a Shell Philippines Exploration B.V.-led consortium.

The Philippine government is promoting LNG imports as an option to supplement the Malampaya resource in anticipation of the depletion of the gas field.