First Gen Corporation
5-29

First Gen open to partner with SMC for LNG project

MANILA, Philippines — First Gen Corp. of the Lopez Group is willing to partner with San Miguel Corp. (SMC) for the development of a liquefied natural gas (LNG) terminal costing at least $1 billion and slated for construction in 2019.

In an interview after the annual stockholders meeting of First Philippine Holdings Corp. yesterday, First Gen chairman and CEO Federico Lopez said they are “very open” to partner with SMC, one of the country’s biggest gas users through the 1,200-megawatt (MW) Ilijan power plant in Pangasinan.

“Their participation in the LNG import scheme will be very, very welcome. In fact, the LNG terminal is subject to economies of scale, so the more that use it, the cheaper it becomes for everybody and the easier it is to bring power costs down,” he said.

First Gen president and COO Giles Puno said talks with SMC should happen within the year if the partnership would push through.

“As I discussed previously, it’s a big investment, it’s about $1-1.2 billion. Because it is such, our view is as long as we have a significant stake and that could be as low as 50 percent, 40 percent, we have to balance what we have to give to other strategic investors,” he said.

“What’s important is everybody has to be in the game, they have to have an investment so that it is in their interest for the investment to succeed. We talk about possibly, the key buyers of the gas, they are incentivized to make sure that the success of investment is there,” he said.

Earlier, First Gen set a goal to finalize partnerships and the engineering, procurement and construction (EPC) contractor for its planned LNG terminal within the year to be able to start development next year.

Meanwhile, SMC president and COO Ramon Ang said the company is considering investments in the LNG sector to meet the future fuel requirements and expand the capacity of the Ilijan power plant.

Ang said SMC is planning to keep the Ilijan plant as a gas-fired generating facility and raise its capacity to 3,000 MW after the independent power producer agreement (IPPA) contract expires in 2022.
He said the group is also open to talks with First Gen to build the LNG terminal.

First Gen’s planned LNG terminal will have the capacity to supply a minimum five million tons of natural gas equivalent to 5,000 MW, located within the Lopez Group’s clean energy complex which houses the 1,000-MW Sta. Rita, 500-MW San Lorenzo, San Gabriel and 97-MW Avion gas plants.

The Lopez Group’s proposed LNG terminal presents a real option for the country because it is currently  the most advanced, company officials said.

The proposal was presented to the government through the Department of Energy (DOE) as a viable option to jumpstart the country’s LNG industry.

It also submitted its intention to participate in the DOE’s Philippine Downstream Natural Gas Regulation (PDNGR) issued in December 2017.

First Gen had previously disclosed that it submitted an unsolicited proposal to state-run Philippine National Oil Co. (PNOC) to participate in its onshore storage and regasification terminal to be constructed within the First Gen clean energy complex.


source: http://www.philstar.com/business/2018/05...9L8PCkJ.99
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8-15

....ok lang Tongue

First Gen reports 35% profit growth

First Gen Corp. saw its recurring net income for the first semester this year surge by 35 percent year-on-year to $115 million from $85 million a year ago, thanks mainly to its natural gas-fired facilities.

The Lopez Group unit said in a statement its natural gas-based business alone accounted for $88 million (P4.5 billion) or 77 percent of total.

Earnings from natural gas assets were 73 percent higher than the $51 million in the first six months of 2017.

The company said the natural gas platform’s performance offset the soft performance of the other platforms.

Also, lower interest expenses as a result of First Gen’s deleveraging initiatives boosted its performance.

Consolidated revenue from electricity sales rose 10 percent to $939 million from $854 million, with the natural gas portfolio contributing about two-thirds or $599 million.

“The gas portfolio thrived during the period, especially San Gabriel and Avion that have been able to achieve remarkable turnarounds this year as they delivered much needed power to the grid,” First Gen president and chief operating officer Francis Giles B. Puno said.

“For the second half of 2018, San Gabriel shifts to being a contracted provider of electricity to Meralco (Manila Electric Co.) allowing it to achieve stable earnings,” Puno said. “This contract proves the price competitiveness of natural gas-fired power versus coal-fired power even at baseload and more so at mid-merit levels of dispatch.”

On the other hand, Energy Development Corp.’s (EDC)— which contributed 31 percent or $291 million to total consolidated revenues—saw an 8-percent drop in revenue mainly due to the damage sustained by Unified Leyte and Tongonan plants due to a typhoon in December 2017.

FG Hydro, which owns the 132-megawatt Pantabangan-Masiway hydroelectric plants, also reported a 7-percent drop in revenues at $23 million.

“EDC and FG Hydro are expected to perform better in the second half of 2018 as they both have recovered from each of their respective setbacks,” Puno said.

“EDC’s Leyte site is back to pre-earthquake and typhoon levels, while FG Hydro has resumed selling ancillary services since end-March of this year,” he added.


source: http://business.inquirer.net/255643/firs...fit-growth
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...news lang Smile

First Gen still keen on buying PNOC’s banked gas

FIRST GEN Corp. is still on buying the Philippine National Oil Co.’s (PNOC) banked gas after the latter did not respond to its earlier offer.

“We’re asking PNOC what happened. What’s the status of the bidding in July after they released an invitation for September. So it’s not clear with us,” Jerome H. Cainglet, vice-president and head of the gas business unit, told reporters during the two-day Powertrends 2018 conference in Pasay City.

“We did submit an offer before. We submitted back in July,” he said, without disclosing the value it offered. PNOC previously valued the banked gas at P11.9 billion.

Last month, PNOC posted on its website an invitation for interested parties to submit offers to buy its banked gas amounting to 97.67 Petajoules. It set the deadline for submission on Sept. 3, but there is no word on whether it received any offers.

Mr. Cainglet said PNOC had not made it clear whether their discussions would remain valid after the new invitation.

“If you ask PNOC, they would say it’s not a bidding because they are not required under CoA (Commission on Audit) rules to actually bid it out. They can just do whatever they please in terms of how they dispose of it, they can negotiate it,” he said, adding that the disposal is not subject to the government’s bidding rules.

Under the terms of its latest invitation, PNOC wanted the offered price to be in US dollars, exclusive of any applicable taxes, as well as the schedule of withdrawal of the banked gas. It also required the interested buyers to describe the intended use of the gas.

PNOC said at its sole discretion, it reserves the right to accept or reject any or all offers to buy the banked gas. It said it can also suspend or cancel the sale of the banked gas at any time without any reason or liability.

Mr. Cainglet said First Gen had expressed interest in PNOC’s banked gas when it was first offered in 2015, when the two parties had joint negotiations in 2016, and when the state corporation asked for an offer in July this year.

PNOC did not immediately respond to a query on the outcome of its latest invitation for buyers of banked gas.

The banked gas was bought by PNOC from the Department of Energy in 2009, including all the rights, benefits and entitlements of the total 108.6 Petajoules valued at P14.4 billion.

The corporation since then has been trying to sell the gas but was only able to sell 4.61 Petajoules to Power Sector Assets and Liabilities Management Corp. in 2013 for P937 million. Another portion at 6.324 Petajoules was sold to Pilipinas Shell Petroleum Corp. in 2015 for P2.5 billion. 


source: http://www.bworldonline.com/first-gen-st...anked-gas/
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9-18

...balitang FGEN lang Smile

First Gen says power users to save P10B with PNOC gas offer

LOPEZ-LED First Gen Corp. said its offer to buy the government’s banked gas at $3.48 per gigajoules could result in savings for electricity users of close to P0.60 per kilowatt-hour (kWh)or a total of around P10 billion for the period starting next month and early 2024, the year when the Malampaya gas-to-power contract ends.

Jerome H. Cainglet, First Gen vice-president and head of the gas business unit, said his “rough estimate” of savings is the difference between the price the company offered to buy the 97.67 petajoules banked gas owned by state-led Philippine National Oil Co. (PNOC), and the price contracted by the 1,200 megawatt (MW) Ilijan power plant.

“[A consumer using] 500-kWh per month would mean mga (around) P350 per month ang matitipid (will be saved),” he said.

He qualified that the figure represents only the electricity sold by the company. Distribution utilities source energy from different sources, including the power produced by gas-fired plants like those owned by First Gen.

“Sa mga regular, ’yung mga malilit na consumers na 200 kWh per month it would equate to around P140 per month na mababawas sa binabayad nila,” he said.

(For regular or small consumers using 200 kWh per month, it would equate to a reduction of around P140 per month from their bills.)

Mr. Cainglet made the computations during a hearing at the House of Representatives, which inquired into the Malampaya banked gas.

Lawmakers sought answers whether the banked gas will be impaired if it remains unsold once Service Contract 38 held by the consortium that runs the offshore Palawan gas-to-power project expires on Feb. 23, 2024.

Sought for comment, PNOC President and Chief Executive Officer Reuben S. Lista said should he accept the price offered by First Gen of $3.48 per gigajoules, questions might be raised later since the listed company previously offered to buy at $4.50 per gigajoules.

He said several companies are interested in the banked gas, including the Ilijan power plant, which has a contract with the consortium that ends in 2022.

“This is the reason why PNOC is not worried that the banked gas will be stranded,” he said.

Mr. Lista earlier announced that PNOC would be negotiating the sale of the banked gas at a price lower than what it was willing to sell before, after the company twice invited buyers this year but none came forward with an offer.

He said he would be seeking authorization from the PNOC board to allow the company’s management to enter into “comprehensive discussions” or “negotiations” at a price lower than the $6.616 per gigajoules under the Ilijan gas-fired power plant’s gas sale and purchase agreement, or GSPA.

Under a negotiated deal, the Ilijan price will become PNOC’s price ceiling, he said, but declining to give a floor price. It was the minimum price the company was willing to sell before.

Mr. Lista disclosed that First Gen had offered to buy the gas at $4.50 per gigajoules during a verbal discussion. But he said when PNOC made a formal invitation, the Lopez-led group offered $3.48 per gigajoules. A petajoule is equal to a million gigajoules.

The gas, which was paid by the government for its future use, is banked in the reservoir of the Malampaya deepwater gas-to-power project offshore Palawan. A PNOC unit is part of the consortium that developed and operates the project.

The banked gas was bought by PNOC from the Department of Energy in 2009, including all the rights, benefits and entitlements of the total 108.6 petajoules valued at P14.4 billion.

The corporation since then has been trying to sell the gas but was only able to sell 4.61 petajoules to Power Sector Assets and Liabilities Management Corp. in 2013 for P937 million. Another portion at 6.324 petajoules was sold to Pilipinas Shell Petroleum Corp. in 2015 for P2.5 billion.

Five gas-fired power plants in Batangas province, with a combined capacity of 3,211 MW, are the main customers of the Malampaya gas find. The offshore Palawan project is expected to start be depleted starting in 2022 to 2024, but PNOC said the gas find could be stretched until 2027. 


source: http://www.bworldonline.com/first-gen-sa...gas-offer/
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12-6

First Gen, Tokyo Gas to develop LNG terminal in Batangas City

FIRST GEN Corp. signed on Wednesday a joint development agreement (JDA) with Tokyo Gas Co., Ltd. to build a liquefied natural gas (LNG) terminal within the Lopez-led company’s power generation complex in Batangas City.

“First Gen is excited to partner with Tokyo Gas, a world class natural gas and LNG company with vast experience in the development, financing, construction and operations of LNG storage and regasification facilities,” First Gen President Giles B. Puno said in a disclosure to the stock exchange on the same day of the signing.

The listed company, which runs most of the country’s gas-fired power plants, said JDA is a preliminary agreement between the parties at First Gen’s Batangas Clean Energy Complex.

For the Lopezes, the project will be through First Gen unit FGEN LNG Corp. The agreement comes after recent pronouncements from the government describing LNG as vital to ensure the country’s energy security once the Malampaya gas field, which fuels the company’s plants, is depleted.

Tokyo Gas will take a 20% participating interest in the LNG project and provide support in development work to achieve a final investment decision.

Upon reaching that decision under the JDA, the parties will enter into a definitive agreement to proceed with the construction of the project, First Gen said.

First Gen quoted Tokyo Gas President Takashi Uchida as saying that his company, “is pleased and delighted to have signed the agreement with First Gen which is the leading company utilizing environmentally-friendly natural gas in the Philippines, and which has been contributing to realize a low carbon society.”

“First Gen and Tokyo Gas share the common belief that the country needs clean natural gas to produce power which is not only cost-competitive but, given its flexible operations, is the perfect complement to a growing renewable energy industry,” Mr. Puno said.

“Finally, we both share the vision of the Department of Energy in the implementation of LNG projects in the Philippines. First Gen and Tokyo Gas intend to cooperate with all relevant stakeholders who share the same vision to participate in making LNG viable for the Philippines,” he added.

First Gen has around 2,000 MW in operating gas-powered plants, namely: the 1,000-megawatt (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.

Tokyo-based Tokyo Gas is a leading LNG player with 130 years of experience and more than 50 years of experience in the LNG business. It is one of the largest buyers of LNG in the world with an annual volume of 14 million tons per annum (MTPA). Tokyo Gas has over 63,000 kilometers of gas pipelines serving more than 11 million customers.

“Tokyo Gas would like to be instrumental in introducing LNG to the Philippines by pursuing the FGEN LNG Project and developing a safe and stable energy infrastructure system, taking advantage of its LNG expertise accumulated for half a century,” said Mr. Uchida.


source: https://www.bworldonline.com/first-gen-t...ngas-city/
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12-7

...balitang news lang Tongue

First Gen still seeking more partners for LNG terminal

FIRST GEN Corp. has not ended its search for partners for its planned liquefied natural gas (LNG) terminal after the signing of a joint development agreement (JDA) with Tokyo Gas Co., Ltd., a company official said.

“It has always been our plan to bring in third-party investors. It’s just that this is the first. We’ve been in discussion with many different potential partners. We’ve been in discussion with Tokyo Gas for a long time and it’s only now we’ve worked out all of the issues between us,” Jonathan C. Russel, First Gen executive vice-president, said in a chance interview.

First Gen signed on Wednesday a JDA with Tokyo Gas to pursue the joint development of an LNG terminal at the Lopez-led company’s Batangas Clean Energy Complex.

“Between us — both Tokyo Gas and First Gen — we’re actually hopeful that we will bring in additional investors, other people that bring different skills to the table,” Mr. Russel said.

First Gen operates gas-powered plants in Luzon, namely: the 1,000-megawatt (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.

“We have 2,000 MW of existing capacity that we own. There’s another 1,200 MW potentially from Ilijan. And then we’re looking at further expansion, potentially another 1,000 MW. So between those, and depending [on whether] they run at baseload or midmerit, we’re looking at probably an initial supply of 3 going up to 5 million tons per annum (MTPA),” he said.

Mr. Russel estimated the total investment in the LNG terminal to reach between $700 million to $1 billion. He said equity funding will come from First Gen, Tokyo Gas and “hopefully” from other partners.

“The financing depends on how the project is ultimately structured. So we still got work to do to finalize the entire structure, but our intention is to bring in a mixture of international and local banks to finance the project,” Mr. Russel said.

The First Gen-Tokyo Gas deal comes after recent pronouncements from the government describing LNG as vital to ensuring the country’s energy security once the Malampaya gas field, which fuels the company’s plants, is depleted.

Tokyo Gas will take a 20% participating interest in the LNG project and provide support in development work to achieve a final investment decision. Upon reaching that decision under the JDA, the parties will enter into a definitive agreement to proceed with the construction of the project, First Gen said.

Mr. Russel said First Gen continues to look for partners with “experience in developing LNG, experience in developing similar projects, additional skills that we might not have.”

He said a number of foreign companies had expressed “considerable interest in working with us in the Philippines and so we need to focus on those discussions.”

For the LNG terminal, First Gen is looking at supplying to both existing and future power plants, “but also hopefully other power markets outside of Luzon and even non-power markets.”

“We’re installing the ability to fill up trucks loaded with LNG which can transport even within Luzon, for example to the industrial parks. And then also you can use smaller vessels to transport to Visayas and Mindanao. That’s quite exciting,” Mr. Russel added. 


source: https://www.bworldonline.com/first-gen-s...-terminal/
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