First Gen Corp picks JGC as Batangas LNG EPC contractor

Philippine utility First Gen Corporation said it has selected Japan’s JGC Corporation as its preferred EPC contractor for the Batangas LNG terminal project. 

The project is being developed by First Gen through its unit, FGEN LNG Corporation (FGEN LNG).

This marks the conclusion of an extensive EPC tendering phase which commenced in 2014, during which around 22 companies were invited and 18 expressed an interest to participate in the tender process and work on the project, First Gen Corp. said in its statement on Monday.

The project promotes liquefied natural gas (LNG) imports as an option to supplement and replace Malampaya gas, ensuring a sustainable supply to develop LNG for the future in anticipation of the depletion of the Malampaya resource.

FGEN’s immediate focus, in conjunction with its preferred tenderer JGC, is to complete a detailed study focusing on modifications that can be made to FGEN’s existing jetty that would allow FGEN to receive large and small-scale LNG vessels and to continue to receive liquid fuel.

Following the completion of this study, FGEN would then look to commence construction of the modified jetty as soon as possible.

A major benefit of completing this work early would be that as soon as the jetty modifications are completed, FGEN will be able to bring in a Floating Storage Regasification Unit (FSRU) on an interim basis, First Gen said, adding that this will allow it to receive LNG as early as 2021, even prior to the expiration of the Malampaya gas contracts in 2024.

FGEN believes the project and the early entry of LNG will play a critical role in ensuring the energy security of the Luzon grid and the Philippines, particularly as the indigenous Malampaya gas resource can no longer be counted on at all times to produce and provide sufficient fuel supply for the country’s existing gas-fired power plants, and certainly not for additional gas-fired power plants.

The project will be built in the First Gen Clean Energy Complex (FGCEC) in Barangays Sta. Clara, Sta. Rita Aplaya and Bolbok, Batangas City.

In August 2019, the project was declared as an ‘Energy Project of National Significance’ (EPNS) on the basis that the project will require the development of significant infrastructure and capital investment involving complex technical processes and engineering designs that will result in a substantial positive impact on the environment.

FGEN LNG has completed significant pre-development work to make the project site ‘construction ready’. In May 2019, FGEN LNG held a groundbreaking ceremony at the FGCEC.

In March 2019, FGEN LNG received the formal approval of its application for a notice to proceed (NTP) from the DOE, as defined in and required by the Philippine Downstream Natural Gas Regulation. FGEN LNG has requested the DOE to extend its NTP by a further six months.

In December 2018, First Gen signed a joint development agreement (JDA) with Tokyo Gas. The JDA is a preliminary agreement between the parties to jointly pursue the development of the project with Tokyo Gas taking a 20 percent participating interest.