First Gen, Prime Infra agree on lease deal for LNG terminal
Lopez-led First Gen Corp. and Enrique Razon’s Prime Infrastructure Capital Inc. have agreed to a 15-year lease of FGEN LNG’s liquefied natural gas storage and regasification terminal in Batangas.
A terminal lease agreement was signed between FGEN LNG Corp., a wholly owned subsidiary of First Gen, and Gas Aggregator Philippines Inc., a wholly owned subsidiary of Prime Infra.
First Gen said the effectivity of the terminal lease agreement is conditioned upon the satisfaction of a number of conditions precedent.
A memorandum of understanding for the proposed lease of the FGEN LNG terminal was signed earlier this year by First Gen and Prime Infra.
The FGEN LNG terminal, which is located in the First Gen Clean Energy Complex in Batangas City, is expected to accelerate the ability to introduce LNG to the Philippines and will serve the natural gas requirements of existing and future gas-fired power plants of third parties and First Gen’s affiliates.
The company expects the terminal to play a critical role in ensuring the energy security of the Luzon grid and the Philippines.
First Gen is the country’s leading gas power generation company with approximately 2,000 megawatts (MW) in operating gas assets composed of four gas-fired power plants namely 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.
“The Philippine government has determined natural gas as a complementary transition fuel to support the Department of Energy’s 2020-2040 Philippine Energy Plan to ensure energy security, while enhancing the renewable energy capacity of the country,” First Gen said.
The lease of the FGEN LNG terminal will form part of Prime Infra’s proposed gas aggregation strategy that will enable it to deploy a tolling business model.
The proposed business model will in turn allow Prime Infra to leverage on its existing Malampaya project facilities and its expertise in the natural gas market.
President Marcos has approved the renewal agreement for Service Contract 38 (SC 38) which covers the Malampaya gas field.
This allows for the continued production of the Malampaya gas field and ensures that the remaining gas reserves are further explored and utilized until Feb. 22, 2039.
Prime Infra, through Prime Energy, is the operator of the Malampaya gas-topower project.
The company is committed to providing economically enduring, environmentally resilient and socially relevant projects to address urgent priorities in three core sectors – water, sustainable energy and waste management and sustainable fuels.