Lopez-led First Gen Corp. subsidiary, FGEN LNG Corp. has partnered with businessman Enrique Razon’s Prime Infrastructure Capital Inc. exploring the idea of using their assets for optimal impact on remaining the remaining life of the Malampaya gas field.
The agreement formalized as a memorandum of agreement centers on the proposed lease and operation of the liquefied natural gas (LNG) storage and regasification terminal developed by FGEN LNG in Batangas City.
In a disclosure to the Philippine Stock Exchange, First Gen said the lease forms part of Prime Infra’s gas aggregation plan leveraging the Malampaya project and FGEN LNG’s expertise in the natural gas market, to ensure a reliable and lowest cost fuel for the natural gas power plants that rely on the gas field.
The parties did not elaborate the extent of the agreement but said the agreement “embodies a mutual recognition by both FGEN LNG and Prime Infra of the need to ensure a steady and secure source of natural gas providing low-cost and sustainable baseload power through gas aggregation.”
Earlier, First Gen said its LNG import terminal project completed last March is undergoing a so-called “dry commissioning” until September this year when tests are conducted on the facilities without the gas actually running through its systems.
“We just recently filed our application for permit to operate and maintain with DOE. We are now in what we call the dry commissioning phase so that will continue up until around September when the FSRU (floating storage regasification unit) will be commissioned,” said Jonathan Russell, First Gen executive vice president and chief commercial officer, last month.
First Gen is also preparing to issue a tender for cargo of around 160,000 cubic meters of LNG at spot prices that will be utilized for the wet commissioning phase of the terminal when LNG actually flows through its systems without running into trouble.
“We’re in parallel discussions for medium to long-term supply. Those are ongoing with different entities but for now we are prioritizing the spot tender so we can get the project in operation then the medium to long term contract will then follow. We anticipate those will start by 2024 at the earliest,” Russell also said before.
