London, June 19 (The Energy Circle) - Philippine utility company First Gen has signed a significant contract with TG Global Trading, a subsidiary of Tokyo Gas, to enhance the country’s energy security through the supply of a liquefied natural gas (LNG) cargo. This agreement is pivotal in the context of the Philippines' ongoing efforts to diversify and stabilise its energy sources.

Under this contract, TG Global Trading will deliver 125,000 cubic meters of LNG on a delivered ex-ship (DES) basis to First Gen’s affiliate, First Gen Singapore. The cargo is scheduled to arrive at the BW Batangas floating storage and regasification unit (FSRU) at the First Gen Clean Energy Complex (FGCEC) in Batangas City. This facility, which has been operational since June, plays a crucial role in the country’s LNG infrastructure.

This shipment, expected in July 2024, will mark the fifth LNG cargo received by the Philippines, following a recent delivery from China’s CNOOC. First Gen has also expressed its intent to secure long-term LNG contracts to ensure a reliable supply for its gas-fired power plants, highlighting the strategic importance of LNG in the country’s energy mix.

The LNG will be utilised by four gas-fired power plants located at the FGCEC, which collectively boast a capacity of 2,017 megawatts. These plants also source gas from the offshore Malampaya gas field, which has proven resilient against natural disruptions like typhoons. However, the Malampaya field is projected to be depleted by 2027, underscoring the critical role of the LNG terminal in meeting the nation’s energy demands.

To support this transition to LNG, First Gen’s subsidiary, FGEN LNG, in collaboration with Tokyo Gas, developed an interim offshore LNG terminal and secured a five-year time charter party agreement for the BW Batangas FSRU. The inaugural LNG cargo was received last July, marking a significant milestone in ensuring a continuous energy supply for Luzon, the Philippines' largest island.

Additionally, Tokyo Gas has recently divested its minority stakes in four Australian LNG projects. This strategic move allows the company to focus on energy transition investments and medium-term goals, aligning with global trends towards sustainable and diversified energy sources.

This partnership between First Gen and TG Global Trading not only secures an essential supply of LNG but also represents a broader commitment to energy security and sustainability for the Philippines. By investing in reliable and diverse energy sources, the country is better positioned to meet future energy demands and support economic growth.