FIRST Gen Corp. urged government to issue guidelines that will allow long- term contracts for liquefied natural gas (LNG) from the international market, moving the country away from spot contracts.
Francis Giles Puno, First Gen president, said the company would need a steady supply following the commissioning of the company’s offshore LNG terminal in Batangas would
At present, First Gen’s LNG terminal sources its requirement through spot LNG cargo. It has so far contracted four spot cargo since last year.
“And we’re potentially be ordering a fifth shipment,” Puno said.
“Right now we’re only buying spot. Because that’s what the current arrangements will allow for. But that may not necessarily be the cheapest source of gas for the country. So we’re hoping that we can meet with the stakeholders with government to coordinate a much more progressive way of buying my imported LNG in the medium term to long term,” Puno added.
He said First Gen needs to know how much more supply the Malampaya gas field can deliver to determine the volume of long- term that First Gen LNG Holdings Corp. (FGEN LNG), the LNG terminal operating unit of First Gen, has to secure.
The LNG terminal that First Gen had constructed in partnership with Tokyo Gas Co. Ltd. supplements the Malampaya gas that First Gen’s 2,000 megawatts (MW) gas-fired power plants in Batangas operate to generate electricity.
Puno said First Gen is looking towards more collaboration with Tokyo Gas after the company’s 20 percent acquisition of stake in FGEN NG.
“(Tokyo Gas is) one of the largest, one with the highest reputation known globally. So we’re hoping to collaborate with them in terms of how we can improve our efficiencies, including procurement of gas,” said Puno.
Last month, First Gen said that Tokyo Gas and FGEN LNG signed a shareholders’ agreement (SHA) and share subscription agreement (SSA) for the Japan firm’s formal acquisition of stake in the LNG terminal.
“The execution of the SHA and SSA represents the next phase of the parties’ joint development of the project. In particular, the SHA will govern the rights of FGEN LNG Holdings and Tokyo Gas with respect to the ownership and operations of the project,” said First Gen, in a statement.
Once effective, FGEN LNG Holdings will have an 80 percent shareholding while Tokyo Gas will have a 20 percent shareholding in FGEN LNG.
