First Gen could firm up LNG supply deal by mid-December

13 November 2015 | Lee Xieli, LNG Markets Reporter

http://www.icis.com/press-releases/firstgen-lng-supply-deal/?cmpid=NLC|ENER|CHEEN-2015-1124-GLOB&sfid=70120000000taAQ

SINGAPORE, ICIS -

Manila-based independent energy producer First Gen Corp is expected to sign a Heads of Agreement (HoA) for 1mtpa of long-term LNG supply before mid-December 2015, pending the conclusion of a downstream power contract, market sources said.

The LNG deal will run for 20 years and could commence from 2019 or 2021, depending on the start-up of First Gen’s proposed receiving facility.

The contract would use a hybrid pricing of both Henry Hub and Brent crude indexations, sources said. The HoA is expected to be converted into a sales and purchase agreement (SPA) by the middle of 
next year.

The seller is likely to be a portfolio major with experience in handling regasification infrastructure and operations, sources said.  Anglo-Dutch Shell and France-based Total are two of the largest LNG portfolio supply and infrastructure companies. The identity of the seller could not be confirmed immediately.

As First Gen is still in middle of securing finance for its proposed LNG-receiving facility, the producer has to first complete the sale of 1GW of power to the electricity distributor Meralco, sources said.

The company will likely require more LNG imports as its gas-fired generation capacity increases, but that would be from 2022 when its long-term pipeline gas contract ends, the first source said.

First Gen currently has a 1GW Santa Rita gas-fired power plant and a 500MW San Lorenzo gas-fired plant in the Philippines. Its third 500MW power plant is due to be completed by next year.