LOPEZ-LED First Gen Corp. has chosen the local unit of an Australian contractor to build its interim liquefied natural gas (LNG) terminal in Batangas, while it steps up its partnership with Japan’s Tokyo Gas Co., Ltd.
FGEN LNG Corp. picked McConnell Dowell Philippines among bidders for the engineering, procurement, and construction (EPC) contract of its $300-million terminal project, its parent told the stock exchange, Wednesday.
“This was a difficult decision that has been reached after the completion of an extensive tendering process,” First Gen Chief Commercial Officer Jonathan C. Russell said.
The engineering company was previously contracted to build the energy company’s existing liquid fuel jetty, which will be modified to become a multi-purpose structure. Under the new contract, it will construct an adjunct onshore gas receiving facility.
“We expect to finalize the documentation and to execute an EPC contract with McConnell Dowell in the next few days,” Mr. Russell said.
McConnell Dowell is a wholly owned unit of Aveng Ltd., a South Africa-based global construction firm. It is a selective tier-one construction contractor that operates in Australia, Southeast Asia, New Zealand, and the Pacific Islands. The company has recently worked on LNG projects in Indonesia.
Meanwhile, First Gen and Tokyo Gas advanced its partnership as they signed a joint cooperation agreement to pursue the design, development, testing, commissioning, construction, ownership, and operations and maintenance of the interim gas terminal project.
The two companies began working on the project under a joint development deal in December 2018.
Under the latest deal, Tokyo Gas will own a 20% interest in the project. Once it can make a final investment decision, it will enter into a definitive agreement with the local company.
On Sept. 25, the Department of Energy (DoE) signed off the construction of the gas-receiving facility upon approving its permit to construct, expand, rehabilitate, and modify (PCERM).
The project represents the initial phase of First Gen’s LNG terminal project, which the DoE recognized as an energy project of national significance under Executive Order No. 30. This meant that the project can enjoy faster permitting from government agencies.
Its construction is targeted to begin in the last quarter of the year after the company has prepared the design and enhanced safety and work protocols and procedures to minimize the impact of the ongoing coronavirus pandemic on construction personnel and its host community.
According to First Gen, it would be able to bring in imported LNG as early as the third quarter of 2022.
FGEN LNG has yet to issue a binding invitation to three previously disclosed potential bidders that will provide the company with a floating storage and regasification unit (FSRU), a type of vessel which it will need for the interim gas terminal.
The potential bidders are BW Gas Ltd. of global gas shipping company BW Group, New York-listed GasLog’s unit GasLog LNG Services Ltd., and Hoegh LNG Asia Pte Ltd., owned by the Norwegian LNG carrier provider Hoegh LNG Holdings.
The Philippines is looking into LNG imports as an alternative to its sole natural gas-producing field in northwest Palawan. According to the DoE’s projection, the Malampaya gas-to-power project under Service Contract 38 is expected to be completely depleted by 2027.
Shares in First Gen inched up 0.43% to close at P23.60 each on Wednesday. — Adam J. Ang