Listed power generation firm First Gen Corp. said Monday it has awarded a contract to Shell Eastern Trading (Pte) Ltd. for the supply of 154,500 cubic meters of liquefied natural gas for the use of its power plants in Batangas.
The LNG supply will power FGen’s four natural gas plants in Batangas that collectively supply the Luzon Grid of 2,017 megawatts. The LNG supply will be used between August 1 and Septemer 30 this year.
The power plants have been fueled by natural gas from Malampaya. But with reserve of Malampaya starting to decline, FGen has looked to the international LNG market to fuel the power plants.
Financial details of the supply contract weren’t disclosed .
FGen said the LNG cargo from Shell Eastern LNG will be delivered to Subic Bay, where it will also gas up and cool down BW Batangas, FGen’s floating storage regasification unit. An FSRU is a ship that not only stores LNG but could return the LNG into its gaseous stage for use of the power plants.
BW Batangas FSRU at the FGEN LNG Terminal in Batangas and will stay there until it is time to collect the LNG in Subic Bay. BW Batangas is under a five-year time charter party as part of the FGen’s LNG terminal, which is envisioned to accelerate the introduction of LNG in the Philippines.
FGen’s LNG unit recently signed a memorandum of understanding with Prime Infrastructure Capital Inc. for the lease and operation of the terminal but no definitive deal has been struck.
FGen LNG and Prime Infra continue to develop a Gas Aggregator Framework of which the FGEN LNG Terminal is a primary element. The Gas Aggregator Framework is intended to make it possible to blend currently declining volumes of indigenous Malampaya gas with imported LNG to ensure a least-cost solution for consumers, enhance energy security, and provide a competitive power generation market, while exploration activities leading to the commercial development of new indigenous natural gas fields are undertaken.
Prime Infra owns a significant stake in the Malampaya natural gas field.
