First Gen to buy LNG from China
Despite rising tension at West Philippine Sea, the country will source part of its liquefied natural gas (LNG) requirements from a state-owned company in China.
CNOOC Gas and Power Trading & Marketing Ltd. is the latest foreign entity to supply LNG to Lopez-led First Gen Corp.
In a stock exchange filing on Monday, First Gen said it had awarded a contract to CNOOC to deliver one LNG cargo of around 130,000 cubic meters to its subsidiary FGen Singapore Pte. Ltd.
The company is a unit of state-owned China National Offshore Oil Corp. (CNOOC), the largest offshore oil and gas producer in China. In the past, CNOOC had been in talks with
PXP Energy Corp for joint oil and gas exploration but nothing concrete has come out.
Despite the diplomatic chill between the Philippines and China post-Duterte regime, CNOOC has committed to deliver LNG in May this year. It will be unloaded into the storage tanks of a floating storage and regasification unit (FSRU) berthed at the First Gen Clean Energy Complex in Batangas City.
FSRU is a vessel that can transport, store and regasify LNG.
First Gen’s existing gas-fired power plants at the energy complex will utilize the LNG coming from CNOOC, First Gen added.To date, First Gen has four existing gas-fired power plants with a combined capacity of 2,017 megawatts: San Lorenzo, San Gabriel, Santa Rita and Avion gas facilities in Batangas province. They supply a fifth of the energy needs of the Philippines.
Gas-fired power plants emit half of carbon dioxide in comparison with coal-fired power plants, making LNG an important transition fuel to a low-carbon future. However, having a stable supply of LNG is seen imperative.
Before signing an LNG supply deal with CNOOC, First Gen had sealed similar deals with Singapore-based firms TotalEnergies Gas & Power Asia Private Ltd., Trafigura Pte Ltd. and Shell Eastern Trading (Pte.) Ltd.
Through its subsidiary FGEN LNG Corp., First Gen constructed its interim offshore LNG terminal and executed a five-year charter party for the BW Batangas FSRU to provide LNG storage and regasification services.
First Gen previously disclosed it would set aside $90 million to fully operate the LNG terminal, noting it would play a critical role in ensuring the energy security of the Luzon grid and the Philippines.
“The FGEN LNG Terminal will accelerate the ability to introduce LNG to the Philippines, to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN’s affiliates,” it added.
