LOPEZ-LED First Gen Corp. has awarded the contract for its new liquefied natural gas (LNG) cargo to Singapore-based Shell Eastern Trading Pte., Ltd., which will provide supply to its gas-fired power plants in Batangas, its chairman said.
“We just awarded one (contract) to Shell,” First Gen Chairman and Chief Executive Officer Federico R. Lopez told reporters on the sidelines of a conference organized by Net Zero Carbon Alliance on Thursday.
Earlier this month, the company invited bidders for it to procure 154,500 cubic meters of LNG cargo which is scheduled for delivery next month.
The LNG cargo will be delivered to the Subic Bay Freeport in Zambales, where it will be loaded into the BW Batangas, a floating storage and regasification unit, and then used for the power plants.
First Gen has four existing gas-fired power plants with a combined capacity of 2,017 megawatts in the First Gen Clean Energy Complex in Batangas. These plants have been supplied for many years with gas from the Malampaya gas field, the country’s sole natural gas provider.
Its subsidiary, FGEN LNG Corp., constructed an interim offshore LNG terminal and executed a five-year time charter party for BW Batangas to provide LNG storage and regasification services.
As the company procures its LNG requirements via spot purchases, Mr. Lopez said that the Philippines is positioned to get “the best benefit of LNG” through long-term contracting.
“You get better terms, and the country will get better terms and prices if you do it that way. I think that’s really where we really need to head,” he said.
“Right now, we’re just all buying on spot, which can be done, but it’s not the most efficient cost for the country. The country can do better if we all work together,” he added.
In June, First Gen President and Chief Operating Officer Francis Giles B. Puno said that they had deferred the delivery of its fifth LNG cargo as it still has residual supply.
Japanese company TG Global Trading Co. bagged the contract to supply one LNG cargo of approximately 125,000 cubic meters which was supposedly be delivered in July.
Asked if the company will buy another supply this year after the recent purchase, Mr. Lopez said: “As long as it’s needed because you have to keep the lights on.”
“But again, as we’re saying, it’s always better if you can get into large volumes. Again, if the country gets together and we all contract, pool our volumes together,” he said.
First Gen completed its first LNG cargo delivery in Subic in Aug. 2023 and made subsequent deliveries at its Batangas complex in Dec. 2023 and Feb. and May 2024.
At the local bourse, shares in the company went up by 0.59% to close at P17 each. — Sheldeen Joy Talavera
