First Gen, Philippine’s power provider has granted green light to construct a $300 million floating LNG terminal jointly with Japanese utility Tokyo Gas. On Friday, September 25, the company was granted approval from The Philippine Department of Energy, and the construction will begin next month, with completion on Q3 2022. The project will be held off the coast of Luzon, Philippines main island, near one of First Gen’s gas-burning electrical plants. The construction process will transform a liquid fuel transport jetty into a floating storage in a vessel and a regasification unit will be docked continuously at the jetty.
80% of the investment will be picked up by First Gen, and Tokyo Gas will foot the remaining 20%, as this is the first floating LNG terminal project taken by Tokyo Gas. The two companies started their collaboration in 2018 with the initial intention to develop an onshore LNG receiving terminal, before it was switched to a floating terminal for lower construction costs. However, floating terminals are highly vulnerable to severe weather and typhoons, so the expanded capacity will be limited. If there’s greater demand, a discussion about construction of an onshore terminal will still be on the table. First Gen supplies electricity to Luzon, the main island where the Manila city and surrounding capital area is located. Gas-powered plants currently take deep-sea natural gas, extracting the fuel from the natural gas fields off the Palawan islands, in the southwest of Philippines.
The Palawan gas field has already been projected to dry up within the next decade, and this condition has spur a search for alternative natural gas sources.
