FGEN LNG Corp. of the Lopez Group and Prime Infrastructure Capital Inc. of businessman Enrique Razon Jr. signed Thursday a memorandum of understanding for the proposed lease and operation of the liquefied natural gas storage and regasificaton terminal being developed by the former at the First Gen Clean Energy Complex in Batangas City.
First Gen is developing the LNG terminal in Batangas that is set to start commercial operations this year to cater to natural gas power plants in Batangas.
“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,” First Gen said in a disclosure to the stock exchange.
“The agreement 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,” the company said.
First Gen said the aggregator enables the formation of a competitive gas market underpinned by the growth of the natural gas power generation capacity in line with Department of Energy’s power development plan, the availability of LNG as a new fuel source and the exploration for and commercial development of new indigenous natural gas fields.
It said this is in response to President Ferdinand Marcos Jr.’s urgent call for significant undertakings to ensure national competitiveness.
The Department of Energy certified the FGEN LNG terminal as an energy project of national significance on Aug. 5, 2019. The agency is pushing for natural gas as a complementary transition fuel under the 2020-2040 Philippine Energy Plan to ensure energy security, while enhancing the renewable energy capacity of the country.
President Marcos recently approved the renewal agreement for Malampaya Service Contract No. 38, allowing the continued production of the Malampaya gas field and ensuring that the remaining gas reserves are further explored and utilized until Feb. 22, 2039.
First Gen is one of the biggest independent power producers in the country and the leading gas power generation company in the Philippines with about 2,000 megawatts in operating gas assets composed of the 1,000-MW Santa Rita Power Plant, the 500-MW San Lorenzo Power Plant, the 414-MW San Gabriel Power Plant and the 97-MW Avion Power Plant.
Prime Infra is the infrastructure arm of Razon with investments in water, sustainable energy and waste management and sustainable fuels.