July 11, 2023 [Energy Intelligence]- Philippines power utility First Gen (FGen) has selected Shell to supply the first LNG cargo to its new terminal, the second regasification facility to start up in the Southeast Asian country this year.
First Gen said Shell would deliver the 154,500 cubic meter-cargo between Aug.1 and Sep. 30 on a delivered basis to its wholly owned subsidiary First Gen Singapore. The award followed a tender issued last month.
Meanwhile, Shell has delivered Vietnam’s first LNG cargo on Maran Gas Achilles to state Petrovietnam Gas’ Thi Vai terminal, which arrived Monday.
Doubling Up
The cargo from Shell Eastern Trading would be used for the gassing-up and cooling-down of FGen’s leased BW Batangas floating regasification and storage unit (FSRU). The gas would be transferred into the tanks onboard the FSRU at Subic Bay, after which the vessel would return to FGen’s interim offshore LNG terminal in Batangas to complete commissioning activities.
Subic Bay, located on the west coast of Luzon island, is a popular spot for carrying out LNG ship-to-ship transfers.
BW Batangas, which arrived on Jul. 8, was loaded with LNG from Cheniere’s Sabine Pass export terminal in the US and successfully moored and secured at the terminal in Batangas.
FGen plans to use imported LNG to feed its gas-fired power plants. The firm has four gas-fired power plants with a combined capacity of 2 gigawatt. which have been receiving gas supplies from domestic Malampaya field where production has been faltering.
FGen plans to use its terminal to meet the requirements of existing and new gas-fired power plants by its own affiliates as well as third parties.
FGen last month signed a memorandum of understanding with Prime Infrastructure Capital for the lease and operation of its FSRU as the latter pursues a gas aggregation business plan. Last year, Prime Infra’s subsidiary Malampaya Energy XP bought Shell’s 45% operating stake in Malampaya.
Although no definitive agreements have been signed yet, FGen said it is continuing to develop a gas aggregator framework with Prime Infra designed to blend declining volumes of Malampaya gas with imported LNG to ensure a “least-cost solution” for consumers, enhance energy security and provide a competitive power-generation market.
Term Supplies Needed
The Philippines joined the ranks of LNG importers in April when it received its first cargo delivered to Philippines LNG’s terminal in Batangas Bay, which was built by AG&P and local firm Linseed Field. Philippines LNG has constructed a hybrid terminal consisted of a floating storage unit Ish supplied by Adnoc LNG and onshore regasification facilities.
Philippines LNG is operating its terminal on a tolling basis. Its anchor tenant is local power utility San Miguel Corp. (SMC), which has committed to LNG contracts with trader Vitol to replace its supplies from Malampaya.
Both FGen and AG&P are expected to seek term LNG supplies to reduce reliance on spot purchases.
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