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First Gen still keen on Malampaya banked gas

First Gen Corp. said it is open to negotiations with state-run Philippine National Oil Co. for the purchase of the Malampaya banked gas at a price lower than the gas supplied to the 1,200-megawatt Ilijan power plant.

“We already submitted an offer before and we don’t know what happened with it. But we continue to maintain the position that if the banked gas were sold at a reasonable price, we could actually utilize it,” First Gen director Richard Tantoco said.

Tantoco said the banked gas, once acquired by First Gen at a lower price, “would be a source of relief for the consumer that’s reeling with inflation right now.” 

The Malampaya consortium currently sells the natural gas output from the Malampaya gas field in northwest Palawan to the Ilijan power plant for $6.616 per gigajoules. 

First Gen wants to use the banked gas for its 414-MW San Gabriel combined cycle power plant in Batangas. First Gen also owns the Sta. Rita, San Lorenzo and Avion natural gas plants also in Batangas.

The company plans to construct its own liquefied natural gas terminal in Batangas to ensure continued natural gas supply to its power plants even after the expected depletion of the Malampaya gas project within the next decade. 

“It’s the right time to unleash that today for the consumer. I think, as you mentioned, they have the authority to negotiate at a lower price,” Tantoco said.

“These banked gas from PNOC will allow us to help government burn or it could be a stranded asset and then offer the much-needed relief. For San Gabriel, instead of drawing out of the existing agreements of the other plants, can draw on this,” he said.

Tantoco said First Gen was “always open to talk” with PNOC which announced it would enter into negotiations for the sale of the Malampaya banked gas after two failed bids.

PNOC president Reuben Lista earlier said he was by the board to  enter into comprehensive discussions/negotiations with prospective buyers of the banked gas at a rate below the Ilijan gas price.

“The results of such discussions/negotiations shall be reported back to the Board for guidance,” Lista said.

PNOC earlier sought out bids for 97.67 petajoules of banked gas or unutilized gas from the Malampaya gas project. PNOC was eyeing around $650 million in proceeds.

Topics: First Gen Corp , Malampaya , Philippine National Oil Co , Reuben Lista
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