The energy supply firm First Gen Corp. (First Gen) on Monday confirmed ongoing discussions with Razon-led Prime Infrastructure Capital Inc. (Prime Infra) to develop a gas aggregation framework with First Gen’s liquefied natural gas (LNG) terminal as a main component.
In a disclosure to the Securities and Exchange Commission, First Gen said the gas aggregator framework being discussed with Prime Infra was meant to “make it possible to blend currently declining volumes of indigenous Malampaya gas with imported LNG.”
The framework, according to the First Gen disclosure, would lead to:
- Least costs for consumers
- Enhanced energy security
- Competitive market for power generation
The disclosure said the framework would complement ongoing commercial development of “new indigenous natural gas fields.”
Key to the gas aggregator framework would be FGen LNG, a wholly-owned subsidiary of First Gen, which had signed an MOA with Prime Infra for the use of its LNG terminal.
It said in the disclosure that the lease of its LNG terminal by Prime Infra is part of the gas aggregation proposal, which would leverage existing Malampaya gas facilities.
Malampaya is being operated by a consortium now led by Prime Infra through Prime Energy.
The proposed framework would also tap the Malampaya consortium’s expertise in the natural gas market.
In an earlier statement, First Gen said its agreement with Prime Infra for the use of the LNG terminal in Batangas City “embodies a mutual recognition of the need to ensure a steady and secure source of natural gas providing low-cost and sustainable baseload power through gas aggregation.”
First Gen runs four gas-fired power plants with a combined capacity of 2,017 megawatts and which have been getting supply from Malampaya for many years.
The gas aggregate proposal has been presented to President Ferdinand “Bongbong” Marcos at the Palace recently.
“It seems that this gas aggregator idea is the key,” Marcos said after the proposal was presented to him by officials of the Malampaya consortium, led by Razon.
“We have work to do,” Marcos said.
The gas aggregator framework “establishes a resilient and efficient natural gas supply chain,” according to Prime Infra president and CEO Guillaume Lucci in a statement.
TSB
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