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MANILA – Philippine energy provider First Gen received the go-ahead to build a $ 300 million floating liquefied natural gas terminal together with Japanese company Tokyo Gas.
First Gen said Friday that it obtained approval for the project from the Philippine Department of Energy. Construction begins next month and its completion is scheduled for the third quarter of 2022.
The project will modify an existing liquid fuel transportation dock near one of First Gen’s gas power plants off the coast of the main island of Luzon. A vessel called a floating storage and regasification unit will be continuously moored at the dock.
First Gen will take over 80% of the investment, while Tokyo Gas will keep the other 20%. This is the first floating LNG terminal project undertaken by the Japanese company.
The two companies teamed up in December 2018 to develop an onshore LNG receiving terminal, but plans were switched to a floating terminal to reduce construction costs.
However, floating LNG terminals are highly vulnerable to typhoons and other adverse weather conditions, so there are limits to expanding capacity. A land terminal remains on the table if there is greater demand.
First Gen supplies electricity to the island of Luzon, which is home to the Philippine capital of Manila. Currently, the gas plants draw fuel from a deepwater natural gas field off the island of Palawan in the southwest.
The gas field is expected to dry out in the next decade. This has triggered a search for alternative sources of natural gas.
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