First Gen issues tender for new spot LNG cargo

Power producer First Gen is seeking one spot LNG cargo for its FSRU-based import terminal in Batangas, Philippines.

The firm controlled by the Lopez family said it seeks to procure a single cargo of LNG via its unit First Gen Singapore on a DES basis, to be utilized by FGEN’s existing gas-fired power plants in its complex in Batangas.

According to First Gen, the selected bidder will deliver the LNG cargo of 100,000-135,000 cbm to the 162,000-cbm FSRU BW Batangas from May 25 to May 31, 2024.

First Gen expects to award the tender on April 12.

Fifth tender

This is the fifth tender the company issued since last year.

Prior to this tender, the firm launched a tender for a delivery from March 15 to March 31, 2024.

However, the firm said in a filling to the stock exchange on February 28 that it will not award this emergency tender if it does not get firm commitment from Manila Electric regarding the costs of the LNG supply.

Meralco said that it is constrained to not pay for certain LNG-related costs during commercial operations of the Santa Rita, San Lorenzo, and San Gabriel power plants in the absence of clearance from the Energy Regulatory Commission (ERC).

These plants get supplies from the Malampaya gas field but the supplies are insufficient to meet the baseload requirements of the plants, according to First Gen.

In case when Malampaya gas supply is curtailed, the Santa Rita and San Lorenzo power plants have the ability to operate on liquid fuel.

However, “liquid fuel is currently more expensive than either Malampaya gas or LNG,” First Gen said.

First Gen said it launched the emergency tender process for a fourth LNG cargo in the interest of energy security.

The firm said the LNG delivery would ensure that the gas plants have the option to have a full LNG inventory prior to the advent of the summer months, when a “shutdown should certainly be avoided.”

ERC allows limited use of LNG

The ERC said on Wednesday it has resolved to allow First Gas Power (FGPC) and FGP Corporation (FGP) to use LNG as an alternative fuel supply source to run the Santa Rita and San Lorenzo gas plants, respectively, but only in the case of the occurrence of a fuel supply force majeure event.

The ruling stems from Meralco’s application seeking the Commission’s approval to pass on to consumers the recovery and payment of LNG costs during “test and commissioning”, LNG costs during commercial operations, and Malampaya natural gas costs under its new gas sale and purchase agreement, it said.

Moreover, the Commission found that the subject PPAs allow for the supply from other sources of gas in cases of a “fuel supply force majeure event.”

The Commission further determined that the shortage of the Malampaya natural gas, the primary fuel being used to generate power for the gas plants, qualifies under the terms defined in the PPAs as a fuel supply force majeure event.

Shell, Trafigura, TotalEnergies

LNG giant Shell suppled the first LNG cargo for commissioning purposes to First Gen’s FSRU-based LNG terminal in August last year.

Shell delivered the LNG cargo from Australia onboard the 2021-built 174,000-cbm, LNGShips Manhattan.

Moreover, First Gen selected Trafigura to supply the second LNG cargo and the energy trader supplied the cargo with the 2021-built 174,000-cbm LNG carrier, Hellas Diana, owned by Latsco and chartered by Trafigura.

TotalEnergies Gas & Power Asia, a unit of French energy giant TotalEnergies won a tender to supply the third cargo in December.

The 2020-built 174,000-cbm LNG carrier, Qogir, owned by TMS Cardiff Gas and chartered by TotalEnergies, delivered the third LNG cargo to the FSRU from the Inpex-operated Ichthys LNG plant in Australia.

As per the FSRU, First Gen awarded in 2021 the five-year FSRU contract to BW LNG, as it looks to replace declining volumes from the Malampaya gas field.

BW Batangas arrived in the Philippines in June last year to start serving First Gen’s LNG import terminal developed by its unit FGEN LNG.

This is the second LNG import facility in the Philippines as Singapore’s LNG firm AG&P kicked off commissioning activities in Apriil 2023 at the country’s first import terminal following the arrival of the 137,500-cbm FSU Ish at the terminal’s jetty in Batangas Bay.

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