A MEMORANDUM of understanding has been signed by FGEN LNG Corp. (FGEN LNG) and Prime Infrastructure Capital Inc. (Prime Infra) on Thursday, June 1, for the proposed lease and operation of the liquefied natural gas storage and regasification terminal (LNG Terminal) being developed by FGEN LNG within the First Gen Clean Energy Complex in Batangas City.

However, no definitive agreements have been signed by the parties.

The LNG Terminal has been officially certified by the Department of Energy (DoE) as an Energy Project of National Significance and granted a Certificate of Energy Project of National Significance on Aug. 5, 2019.

The Philippine government has determined natural gas as a complementary transition fuel to support DoE’s 2020-2040

Philippine Energy Plan to ensure energy security, while enhancing the renewable energy capacity of the country.

President Ferdinand Marcos Jr. recently approved the renewal agreement for Malampaya Service Contract 38 (SC 38), allowing the continued production of the Malampaya gas field and ensuring that the remaining gas reserves are further explored and utilized until February 2039.The lease of the LNG Terminal will form part of Prime Infra’s proposed gas aggregation strategy that is focused on leveraging its existing Malampaya project facilities, and its expertise in the natural gas market, to ensure a reliable and lowest cost supply of clean gas at stable fuel costs to the country’s natural gas power plants.

The agreement embodies a mutual recognition by both FGEN LNG and Prime Infra of the need to ensure a steady and secure source of natural gas providing low-cost and sustainable baseload power through gas aggregation. The aggregator enables the formation of a competitive gas market underpinned by the growth of the natural gas power generation capacity in line with DoE’s power development plan, the availability of LNG as a new fuel source, and the exploration for and commercial development of new indigenous natural gas fields, all in response to the President’s urgent call for significant undertakings to ensure national competitiveness.

Prime Infra is a leading and fast-growing sustainability-driven infrastructure arm of Filipino businessman Enrique Razon Jr. which is committed to providing economically enduring, environmentally resilient and socially relevant projects to address urgent priorities in three core sectors — water, sustainable energy, waste management, and sustainable fuels.

FGEN LNG is a wholly owned subsidiary of First Gen Corporation, one of the biggest independent power producers in the country and the leading gas power generation company in the Philippines with approximately 2,000 MW in operating gas assets composed of four gas-fired power plants — the 1,000-MW Santa Rita Power Plant, the 500-MW San Lorenzo Power Plant, the 414-MW San Gabriel Power Plant, and the 97-MW Avion Power Plant. First Gen Corp. is the primary power generation arm of the Lopez Group of Companies, led by its chairman, Federico Lopez.