First Gen Corp. subsidiary FGEN LNG Corp. signed a memorandum of understanding (MOU) with Prime Infrastructure Capital Inc. for the proposed lease and operation of the liquefied natural gas (LNG) storage and regasification terminal being developed by FGEN LNG in Batangas City.
However, the parties clarified that there are no definitive agreements yet.
In a disclosure to the Philippine Stock Exchange, First Gen said the lease of the LNG terminal will form part of Prime Infra’s proposed gas aggregation strategy that is focused on leveraging its existing Malampaya project facilities and its expertise in the natural gas market, to ensure a reliable and lowest cost supply of clean gas at stable fuel costs to the country’s natural gas power plants.
The parties said the MOU “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 was completed last March but will still undergo a “dry commissioning phase” until September.
“We just recently filed our application for permit to operate and maintain with DOE (Department of Energy). 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.
“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 had said.
