STA. RITA, PHILIPPINES, Jan 14 (Reuters) - The Philippines’ First Gen Corp plans to build a $1 billion LNG import terminal and bring it online by the end of 2019, as it seeks to secure supply for its growing portfolio of gas-fired power plants, senior executives said on Tuesday.
The country’s biggest renewable energy producer has plans to construct new gas-fired power plants, starting this year, with a combined capacity of 1,342 megawatts - bringing the firm’s total capacity of liquefied natural gas-fired facilities to more than 3,000 megawatts by 2019.
First Gen’s goal is to help avert an expected power shortage in 2016 in Luzon, the country’s most populous island, that will hurt consumers and disrupt the economy’s growth momentum, Chief Executive Federico Lopez said.
“We are aware that the Luzon grid will need an additional 600 megawatts of new, more efficient capacity to meet a growing demand for electricity supply starting 2016,” he said.
First Gen, also one of the Southeast Asian country’s biggest power producers, broke ground on Tuesday on its third gas-fired power plant - the $600 million San Gabriel unit that will generate 414 megawatts.
Construction of the land-based terminal for imported LNG can be completed in three years, with First Gen targeting to open the facility in 2018 or 2019 near its three gas-fired power plants in Batangas province, Lopez said.
In June 2013, Royal Dutch Shell said it was looking to build the Philippines’ first LNG import terminal in the next two to three years, possibly a floating facility near Shell’s Tabangao refinery also in Batangas, with the final investment decision to be made in 12 months.
First Gen’s San Gabriel will initially run on natural gas produced from the Malampaya field off southwestern Palawan province, which is operated by a consortium led by Shell Philippines Exploration B.V.
The firm’s two other plants powered by Malampaya gas - Santa Rita and San Lorenzo in Batangas City - generate a combined 1,500 megawatts.
“Our current gas supply contracts from Malampaya will expire in about ten years’ time, so we are already preparing for a post-Malampaya gas world to provide replacement fuel for our new and existing power plants,” First Gen President Francis Giles Puno told reporters.
Discovered in 1992, the Malampaya natural gas helps generate 2,700 megawatts which accounts for about 40 percent of Luzon’s power requirements. The government has said that Malampaya’s output may run out by 2024.
First Gen is looking at a combination of debt and equity to finance both the LNG terminal and some $1.5 billion investments in new gas-fired power plants, Puno said.
It currently has 15 power plants with a total installed capacity of 2,763 megawatts, including 11 geothermal power plants operated by its Energy Development Corp unit.