First Gen, Tokyo Gas to build offshore LNG import terminal

Oct 08, 2020

First Gen Corp. signed a deal with Tokyo Gas Co. Ltd. to push ahead with a joint project to develop a temporary offshore import terminal for liquefied natural gas (LNG) in Batangas City. It also picked an Australian engineering firm to build it.

The Lopez-led firm said on Wednesday construction would likely begin within the next 12 weeks and that the interim offshore terminal (IOT) could start receiving LNG as early as the third quarter of 2022.

LNG imports are meant to serve the natural gas requirements of existing gas-fired power plants—many of which are operated by the First Gen group—as well as future plants, whether belonging to the group or to other parties.

The IOT is intended to make LNG available in the Philippines as early as possible in transition to the ultimate project, a permanent terminal at the First Gen Clean Energy Complex.

The newly signed joint cooperation agreement builds on and shifts from a previous joint development agreement, which kicked off the joint venture in December 2018.

The new agreement commits First Gen and Tokyo Gas to jointly pursue the design, development, testing, commissioning, construction, ownership and operations and maintenance of the IOT Project.

Barely two weeks ago, First Gen received from the Department of Energy a permit for the floating LNG terminal, for which First Gen applied last March.

Also, under the new pact, Tokyo Gas will have a 20-percent participating interest in the IOT project and provide support in development, construction, operations and maintenance work to achieve a final investment decision.

The next step would be for the two partners to forge a definitive agreement on the IOT project.

First Gen’s subsidiary FGEN LNG has chosen Australia-rooted McConnell Dowell Philippines as the preferred bidder for the contract to build the IOT.

“We know that McConnell Dowell has extensive international experience building similar LNG facilities in Australia and Southeast Asia, and, they will be assisted by the fact that they constructed the existing liquid fuel jetty at the First Gen Clean Energy Complex,” First Gen chief commercial officer Jonathan Russell said.

“We expect to finalize the documentation and to execute an EPC contract with McConnell Dowell in the next few days,” Russell added.