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Sep 03, 2019
FIRST GEN Corp. has chosen Japan’s JGC Corp. to handle the engineering, procurement and construction (EPC) of its liquefied natural gas (LNG) terminal project in Batangas City, the Lopez-led company said on Monday.
“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 [FGEN Batangas LNG Terminal] Project,” it told the stock exchange.
First Gen is developing the project through its subsidiary FGEN LNG Corp., which completed pre-development work to make the site construction-ready. The unit held a groundbreaking ceremony in May this year at the First Gen Clean Energy Complex in barangays Sta. Clara, Sta. Rita Aplaya and Bolbok, Batangas City.
Jonathan C. Russell, First Gen executive vice-president and chief commercial officer, said the group was looking forward to working with JGC on the project, which the Department of Energy (DoE) certified last month as an “Energy Project of National Significance.” The certificate allows a faster permitting process, among other perks.
Mr. Russell said the LNG terminal is crucial to ensure the continued operations of the country’s 3.2-gigawatt existing natural gas-fired plants “given the expected and continuing reduction in gas supply from the Malampaya field up to the expiration of the contracts by 2024.”
Ahead of 2024, First Gen said its immediate focus, along with JGC, is to complete a detailed study on modifications that can be made to the group’s existing jetty that would allow the facility to receive large- and small-scale LNG vessels, and to continue to receive liquid fuel.
First Gen will then look to start building the modified jetty “as soon as possible.” The early completion of this work will allow bringing in a floating storage regasification unit (FSRU) on an interim basis during the Duterte administration.
“This would reduce the strain on Malampaya as its reliability continues to decline up to 2024, increasing the energy security of the Philippines and reducing the number of times that FGEN will be requested to run on liquid fuel when Malampaya gas is unavailable,” Mr. Russell said.
The FSRU will allow First Gen to receive LNG as early as 2021, or before the expiration of the Malampaya gas contracts. The LNG storage ship has an onboard regasification plant capable of returning the liquefied fuel back into a gaseous state. The gas can then be supplied directly to some or all of the company’s existing power plants.
Mr. Russell said the early completion of the facility would also enable LNG “to immediately become a fuel choice for any developer that is considering the building of new gas-fired power plants with a lower carbon footprint.”
The move will support the entry of more intermittent renewables as an alternative to building new coal-fired power plants and also offer a potential means for the Ilijan project to receive gas after its contract with Malampaya ends in 2022, he added.
First Gen described the project as possibly “the most significant energy infrastructure project to be undertaken in the Philippines in more than two decades.”
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. The unit has requested the agency to extend its NTP by a further six months.
The entry of JGC comes after First Gen in December 2018 signed a joint development agreement with Tokyo Gas Co., Ltd., which is taking a 20% participating interest in the project. The signing is a preliminary agreement between the parties to jointly pursue development of the LNG terminal.
First Gen described JGC, as focusing on consulting, planning, basic and detailed design, materials and equipment procurement, construction, commissioning, operation and maintenance services for various process plant and facilities, as well as power generation investment and operation, and technology development services.
Established in 1928 in Yokohama, Japan, JGC is listed on the Tokyo Stock Exchange and has built more than 20,000 projects in more than 80 countries, it added.
“These projects have centered on the oil and gas sector, including oil, natural gas, petrochemicals, and gas chemicals, as well as a variety of other business sectors including energy infrastructure,” First Gen said.
On Monday, shares in First Gen rose by 1.14% to P26.70 each.
Originally posted by:
Aug 26, 2019
First Gen Corp. is developing a pumped-storage facility to increase the capacity of the 132-megawatt Pantabangan-Masiway hydro plant in Nueva Ecija by another 100 MW.
“The facility is expected to store and generate electricity by moving water between the Pantabangan reservoir and the Masiway reservoir which are situated at different elevations,” First Gen said in a disclosure to the stock exchange.
It said the project would allow the full-year operations of the power plant.
First Gen and Energy Development Corp. own 40 percent and 60 percent of First Gen Hydro Power Corp., the owner and operator of the existing Pantabangan-Masiway hydro plant.
First Gen is a subsidiary of First Philippine Holdings Corp., a conglomerate controlled by the Lopez family.
The Pantabangan pumped-hydro storage project is one of First Gen’s projects in the pipeline.
The company will also start the construction of the 32-MW Bubunawan run-of-river hydro project in Mindanao, “subject to clarity in the Philippine market and regulatory regime.”
First Gen has licenses to develop three other run-of-river projects in Mindanao including the 33-MW Tagoloan, the 30-MW Puyo and the Cagayan 1N.
The company is also pursuing its liquefied natural gas terminal project in Batangas and the expansion opportunities in geothermal, wind and solar.
First Gen posted $156 million in recurring attributable net income of the parent company in the first half, up 36 percent from $115 million a year ago, driven by the strong performance of its clean energy platforms.
“First Gen’s focus on clean, low-carbon and renewable energy continues to pay off as our first-semester results overtake last year’s. For the remainder of the year, we expect all the platforms to continue to deliver stable earnings,” First Gen president and chief operating officer Francis Giles Puno said earlier.
EDC delivered $49 million (P2.6 billion) in recurring earnings from its geothermal, wind and solar platform in the six-month period, better by $16 million (P900 million) than $33 million (P1.7 billion) in the same period last year as the Unified Leyte and Tongonan geothermal plant operations continued to normalize and deliver higher earnings after recovering from the damage caused by Typhoon Urduja in December 2017.
Originally posted by:
Aug 20, 2019
Lopez-owned First Gen Corporation has indicated to the Department of Energy (DOE) that it will be seeking extension for the notice-to-proceed (NTP) of its US$1.0 billion liquefied natural gas (LNG) import terminal project.
The company’s NTP will lapse this August, but under the Philippine Natural Gas Industry Rules, this could still be extended by another six months upon application with and approval by the DOE.
“They (First Gen executives) did manifest informally that they will be filing for extension –they will need more time to reach financial closing and final investment decision,” Energy Assistant Secretary Leonido Pulido III has disclosed.
He added that the NTPs granted to the proponent of LNG import facilities are just for duration of six months, but there is a leeway for extension of another six months.
After the end of the six-month extension, he noted that the expected milestones from the project sponsor will be final investment decision (FID) and financial closing.
Following that process, Pulido emphasized that the next step will be for the project to move to construction phase and that will require another round of securing permit from the department.
“After the end of the six-month extension and having FID, they need to submit application for construction which is almost automatic,” the energy official explained.
First Gen already broke ground on its propounded onshore LNG import terminal venture in May this year – but it manifested that FID will be reached by yearend up to early part of 2020 yet.
The company has been scouting for other partners that will share in equity investment in the project – on top of the 20-percent stake already cornered last year by Tokyo Gas Co. Ltd.
The FID announcement, according to company executives, will coincide with the firming up of new joint development agreements (JDAs) with other targeted partners – which are also likely deep-pocketed global players in the LNG sector.
Beyond the import terminal, First Gen has also been casting two greenfield power projects that will have aggregate capacity of 1,200 megawatts via its blueprinted Santa Maria and Saint Joseph power projects.
The targeted timeline of completion of the new power facilities will be in 2024; and these capacities are now being offered in the competitive selection process (CSP) for greenfield capacity of power utility giant Manila Electric Company.
Originally posted by:
Aug 17, 2019
MANILA, Philippines — First Gen Corp. (First Gen), the listed energy company of the Lopez Group, reported a net income of $156 million or P8.2 billion in the first half, up 36 percent year-on-year.
Consolidated revenue from the sale of electricity increased by 15 percent to $1.1 billion or P58.1 billion.
First Gen’s Energy Development Corp. delivered recurring earnings from its geothermal, wind, and solar platform of $49 million or P2.6 billion.
All four of First Gen’s natural gas-fired power plants delivered increased recurring earnings.
“While the two older plants, — the 1,000 MW Santa Rita and the 500 MW San Lorenzo — benefitted from lower operating expenses, the two newer gas plants — the 420 MW San Gabriel and the 97 MW Avion — generated higher electricity sales from their respective customers,” First Gen said.
The gas platform generated $105 million (P5.5 billion) in the first half, up 19 percent.
First Gen’s focus on clean, low carbon and renewable energy continues to pay off as first semester results overtook last year’s.
“For the remainder of the year, we expect all the platforms to continue to deliver stable earnings,” First Gen president and chief operating officer Francis Giles Puno said.
The company continues to work on the development of the country’s first LNG terminal.
Meanwhile, Lopez Holdings Corp., the listed holding company of the Lopez family, reported a net income of P4.18 billion in the first half, up 99.7 percent.
“The steady performance of the energy group under associate First Philippine Holdings Corp. as well as the strong recovery of investee ABS-BCN Corp. accounted for the results,” Lopez Holdings said.
Consolidated revenue grew 16 percent to P67.9 billion.
Originally posted by:
The Philippine Star
Aug 09, 2019
FIRST GEN. Corp. said on Thursday that the Department of Energy (DoE) had approved its application to have the company’s liquefied natural gas (LNG) import terminal project declared as nationally significant, making it easier for the company to secure permits.
In a disclosure to the stock exchange, the Lopez-led company said the Energy Investment Coordinating Council (EICC), a multi-agency panel led by the DoE, declared the FGEN Batangas LNG Terminal Project as an energy project of national significance (EPNS) under Executive Order (EO) No. 30.
Jonathan C. Russell, First Gen executive vice-president and chief commercial officer, said the project is crucial to ensure the continued operations of the 3.2-gigawatt existing natural gas-fired power plants in the country amid the expected reduction in gas supply from the Malampaya field up to the expiration of the contracts by 2024.
“First Gen will continue to work hard to ensure that this project will also be available to allow the development of new gas-fired capacity, with a lower carbon footprint that will support introduction of more intermittent renewables for the Philippines,” he said in a statement.
First Gen said its wholly owned subsidiary was issued a certificate of EPNS.
“EPNS are significant energy projects for power generation, transmission, and/or ancillary services including those required to maintain grid stability and security, and which are in consonance with the policy thrusts and specific goals of the DOE’s Philippine Energy Plan (PEP),” it said.
EO 30 intends to establish a simplified approval process and harmonize the relevant rules and regulations of all government agencies involved in the permitting process.
First Gen said the unit’s application was based on the project’s requirement to develop significant infrastructure and capital investment “involving complex technical processes and engineering designs that will result in a substantial positive impact on the environment.”
It said the project will also provide “a consequential economic impact that will contribute to the country’s economic development and healthy balance of payments.”
It added that the project is consistent with the DoE’s Nine Point Energy Agenda and PEP 2017-2040 as it promotes LNG importation as an option to supplement and replace Malampaya gas, ensuring a sustainable supply to develop the fuel for the future in anticipation of the depletion of the offshore resource.
First Gen’s import terminal will be built in the First Gen Clean Energy Complex in Barangays Sta. Clara, Sta. Rita Aplaya and Bolbok, Batangas City. It will be owned and managed by FGEN LNG.
The EPNS certification comes months after First Gen signed in December 2018 a joint development agreement with Tokyo Gas Co., Ltd. to pursue the development of the project where the foreign partner took a 20% participating interest.
In March 2019, FGEN LNG received the formal approval of its application for a “notice to proceed” from the DoE, as defined in and required by the Philippine Downstream Natural Gas Regulation.
First Gen said the entry of LNG would encourage both industrial and transport industries to consider it as a replacement to more costly and polluting fuels.
On Thursday, shares in First Gen closed higher by 1.75% at P26.20 each.
Originally posted by:
Jul 13, 2019
Lopez-owned First Gen Corporation has been recognized in the recently concluded “CWC Asia Pacific LNG Innovation Award” – bagging the runner-up spot for its planned 3.0 to 5.0 million tons per annum (mtpa) liquefied natural gas (LNG) import terminal project to be sited at its Clean Energy Complex in Batangas.
On the accolade bestowed on its LNG project, First Gen executive vice president and chief commercial officer Jon Russell asserted “we were honored that we were even nominated – it’s a vindication of all the hard work that we’ve done. And the fact that these experts recognize the Philippines is now taking us into the right steps to make the project happen.”
The top prize in the LNG awards went to the 12.88 mtpa Mozambuque LNG project of American firm Anadarko, which is at its full implementation stage.
Russell professed that the Mozambique project really deserved to win because it’s a venture that already moved headway into final investment decision (FID) and construction – and had the blueprinted first phase of the facility already completed.
Nevertheless, Russell is wishing for a big comeback for the Philippines next year, once the First Gen LNG terminal project clinches FID phase. “We shall be back, and maybe next year, we can win,” the First Gen executive stressed.
On the Philippines now being widely in the radar of global gas investors, Russell opined that the country is perceived a pivotal emerging player because it is now advancing its way into putting up the country’s first LNG import terminal — and such development is also considered trailblazing because it will mark the rebirth of the gas industry post-Malampaya.
“It’s difficult but I think we’ve got great opportunity. We’re working very hard to make it work,” Russell indicated; adding that “I think 2019 is an important year because we need to keep the lights on, so we need to make an investment decision later this year or early next year to make this whole project work.”
Global players in the LNG industry had singled out the Philippines as an “important market” that investors have been keeping a close watch on for next round of project developments.
At the recent CWC LNG Asia Pacific Summit in Singapore, Dr Pat Roberts, managing director of LNG Worldwide, reckoned that in the Southeast Asian region, Philippines and Vietnam are the markets heeding the LNG investment trajectory that Indonesia had set as a cycle for the gas sector in this part of the continent.
By year 2025-2030, it is seen that the global LNG sector will grow into a 450 to 500 mtpa market; with supply growth coming from Qater, Russia, Africa and the United States.
And that boost in supply, she added will all be “because of confidence in Asian LNG growth,” being that part of the world that will be setting trends on demand expansion.
For the First Gen project in particular, its LNG import terminal venture is targeted for up to 7.0 mtpa over the longer term. The initial investment for the 5.0mtpa phase has been crunched at US1.0 billion.
Parallel to the installation of LNG import terminal that is set reaching commercial operation in 2023, First Gen is likewise pushing forward the developments of two new gas-fired power plants with aggregate capacity of 1,200 megawatts.
Originally posted by:
Jul 02, 2019
Industrial giant Siemens A.G. of Germany indicated that it will submit a tender for the engineering, procurement and construction (EPC) contract that project developer First Gen Corporation has been soliciting for its two new power projects.
The German firm was among those being invited by First Gen to submit a bid for the targeted EPC deal for the company’s 600-megawatt Santa Maria and 600MW Saint Joseph gas-fired power facilities.
“Siemens intends to submit a bid,” Siemens Regional Chief Executive Officer Dr Armin Bruck said, looking forward to a prospective fourth power plant development that it will be undertaking with the Lopez group.
Siemens had been the gas turbine supplier and EPC contractor in the last 414MW San Gabriel gas-fired power facility of the Lopez firm that reached commercial operations in 2016.
The company was also instrumental in the construction, supply of equipment and continually manning the operations of the first two gas-fired plants of First Gen – namely the 1,000MW Santa Rita and 500MW San Lorenzo power stations.
“Siemens had successfully built and now managing and operating the 414MW San Gabriel combined cycle power plant, which was the most efficient gas-fired power plant in Southeast Asia when it was commissioned in March 2016,” Bruck emphasized. The plant has a rated efficiency of more than 60-percent.
In addition, the German firm is the Operation and Maintenance (O&M) contractor of the Santa Rita and San Lorenzo plants – a deal stretching over two decades that it cemented with the Lopez firm at the development phase of the two gas-fired power assets.
“With this track record of being the O&M company of First Gen’s fleet in its Clean Energy complex in Batangas, we are confident that we can help First Gen to achieve similar good results with their planned two gas-fired power projects,” Bruck stressed.
The German firm executive further noted “we see huge potential in the infrastructure business in the Philippines – especially in the energy sector where Siemens has made major contribution in recent years.”
On a greenfield development sphere, the two new power projects of First Gen will command investment totaling US$1.2 billion – that is based on prevailing rule-of-thumb development cost for combined cycle power plants.
But as emphasized by First Gen EVP and Chief Commercial Officer Jon Russell, the final extent of capital outlay will be largely determined by the bids that will be submitted by prospective EPC contractors.
The planned Santa Maria and Saint Joseph gas-fired power projects are intended to be equipped with HL Class gas turbines – given the scale of their installed capacities; and the facilities are targeted to reach commercial operations in 2023 to 2024 parallel to the completion of the 5.0 million tons per annum (mtpa) LNG import facility of First Gen.
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