Tokyo Gas Invests in Philippine LNG Sector

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Tokyo Gas Invests in Philippine LNG Sector

Tokyo Gas Co. Ltd. has acquired a 20 percent stake in FGEN LNG Corp., which owns one of two operational liquefied natural gas (LNG) receiving terminals in the Philippines. The FGEN LNG facility in Batangas province, south of Manila, “marks Tokyo Gas’ first investment in a commercially operational overseas LNG terminal project”, the Japanese company […]

Tokyo Gas Co. Ltd. has acquired a 20 percent stake in FGEN LNG Corp., which owns one of two operational liquefied natural gas (LNG) receiving terminals in the Philippines.

The FGEN LNG facility in Batangas province, south of Manila, “marks Tokyo Gas’ first investment in a commercially operational overseas LNG terminal project”, the Japanese company said in an online statement.

It said it had already helped with the development of the terminal, completed 2023, via earlier agreements with First Gen Corp., the 80 percent local owner of FGEN LNG.

“Tokyo Gas will leverage its extensive expertise in the optimal operation of LNG terminals, accumulated over many years in Japan, to support the operation and maintenance of the Terminal”, Tokyo Gas said.

The facility regasifies LNG for feeding into First Gen’s gas-fired power plants, which have a total generating capacity of 2,107 megawatts, according to First Gen.

“This subscription will deepen our partnership and enhance synergy that will boost our efforts in support of the Philippines’ energy security and stability, even as we all pursue decarbonization,” Giles Puno, vice chair and chief executive of FGEN LNG and president of First Gen, said in a separate statement.

Tokyo Gas added, “In the Philippines, robust economic growth and population increase are expected to drive higher demand for electricity”.

“By participating in the Terminal project, Tokyo Gas aims to contribute to the expansion of natural gas utilization and the establishment of an LNG value chain in the country”, it said.

Last month President Ferdinand Marcos Jr. signed a law to establish a downstream gas industry in the Southeast Asian country. The legislation aims to raise the share of gas in the domestic energy mix and position the archipelago as an LNG transshipment hub in the Asia-Pacific.

The Philippine Natural Gas Industry Development Act seeks to “develop natural gas as a reliable fuel for power plants capable of addressing the peaking, mid-merit, and baseload demand of the country to help achieve energy security, while progressively transitioning to renewable energy sources”, states the law, published on the government’s Official Gazette and the Senate’s website.

The government shall also facilitate the development of “non-power end-uses of natural gas which include commercial, industrial, residential, and transport applications that promote fuel diversity”, the law says.

The law prioritizes locally-produced gas over imports so long as this restriction “is consistent with the State’s policy of ensuring energy security and consumer welfare”, as stated in the law.

However, the coal-reliant Philippines has only one active gas field out of two commercial discoveries, according to the Philippine Department of Energy (DOE). And Malampaya, offshore Palawan island, is depleting. Co-developer Shell PLC exited the field 2022.

On the other hand, the DOE has approved several LNG import terminal projects. Two have been completed, in 2023, based on news information from the DOE. Besides the FGEN LNG terminal, the other is owned by Singapore-based AG&P and also located in Batangas.

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