A SUBSIDIARY of First Gen Corp. has entered into a five-year contract to charter a liquefied natural gas (LNG) carrier from a unit of Norway-based BW Gas Ltd. in line with the Lopez-led company’s offshore gas terminal project in Batangas.
In a disclosure on Monday, First Gen said the floating storage regasification unit (FSRU) that will be provided to its wholly owned subsidiary FGEN LNG Corp. is a vessel with a storage capacity of 162,400 cubic meters (m3) under their five-year time charter party.
The FSRU, a liquefied natural gas carrier, will be provided by BW FSRU IV Pte Ltd. The vessel — the BW Paris — has a nominal and peak gas send-out capacity of 500 million standard cubic feet per day (MMscfd) and 700 MMscfd, respectively.
The charter deal comes around two weeks after First Gen said that FGEN LNG was due to select between BW Gas Ltd and Hoegh LNG Asia Pte. Ltd as its FSRU provider by the end of March.
“The nominal send out capacity of the BW Paris is 25% more than the production capability of Malampaya, which at its peak produced a maximum gas volume of approximately 400 MMscfd, and which is now declining,” First Gen told the stock exchange in its regulatory filing.
An FSRU, which typically has a storage capacity of between 125,000 and 170,000 cubic meters, has an onboard regasification plant that can turn LNG back into its gaseous state and supply it directly into a gas network.
The Department of Energy earlier said that the reserves of the offshore Malampaya project, which fuels gas-fired power plants in Luzon, will be completely depleted by 2027.
BW Paris can provide ancillary services in addition to providing storage and regasification, First Gen said, adding that the vessel can reload LNG into trucks and small-scale LNG vessels, which will then distribute the gas to nearby areas.
The firm said that the LNG project will allow its subsidiary to introduce LNG to the country by the third quarter next year to serve the natural gas requirements of existing and future gas-fired plants of FGEN LNG’s affiliates and third parties.
Aside from spurring new power plant developments, the entry of LNG in the Philippines will encourage various industries to consider the fuel as a replacement to “more costly and polluting” fuels, First Gen said.
“FGEN LNG believes the Project will play a critical role in ensuring the energy security of the Luzon Grid and the Philippines, particularly as the indigenous Malampaya gas resource is expected to be less reliable in producing and providing sufficient fuel supply for the country’s existing gas-fired power plants,” First Gen said.
BW FSRU IV is engaged in the global market of transportation and floating regasification services of LNG. It is under BW Gas Ltd., which is wholly owned by the BW Group, a global maritime company.
The group is involved in shipping, floating infrastructure, deep-water oil and gas production, and new sustainable technologies.
In October, FGEN LNG selected McConnell Dowell Philippines, Inc., the local unit of an Australian contractor, for the LNG terminal’s engineering, procurement and construction contract.
In the same month, First Gen signed a joint cooperation agreement with Japan’s Tokyo Gas Co., Ltd to design, develop, test, commission, construct, own, operate and maintain the interim offshore project, which will be built at the First Gen Clean Energy Complex in Batangas City.
Shares of First Gen in the local bourse were unchanged at P30.10 apiece on Monday. — Angelica Y. Yang
