First Gen Corp. is open to teaming up with San Miguel Corp. for a $1.2-billion liquefied natural gas terminal with an annual capacity of 5 metric tons in Batangas province.
“We’re very open to, especially because they’re one of the big users of gas, Ilijan. Their participation in the LNG import scheme will be very, very welcome,” First Gen chairman and chief executive officer Federico Lopez said after stockholders’ meeting of parent First Philippine Holdings Corp.
San Miguel president Ramon Ang earlier said his company might team up with First Gen.
“We can build or partner with First Gen… We have quite a lot of options. SMC and First Gen are quite close,” he said.
Ang said San Miguel could expand the capacity of the 1,200-megawatt Ilijan natural gas power plant by another 1,800 MW later on, once LNG became available in the country.
“In fact, the LNG terminal is very subject to economies of scale, so the more that use it, the cheaper it becomes for everybody and the easier it is to bring power costs down,” Lopez said.
First Gen president Francis Giles Puno said San Miguel and the company had a good relationship.
“We also feel we have good relationship with San Miguel. As we have said before, the discussions have been ongoing with a number of parties. San Miguel, obviously, is a discussion we would welcome as well, principally because of the Ilijan assets,” Puno said.
The First Gen official said the Ilijan power power plant would run out of gas supply sooner than the Sta. Rita and San Lorenzo natural gas stations of the company.
“Since it is running out of gas sooner, it is in a position where it needs the gas sooner than our projects,” he said.
Puno said discussions would be firmed up within the year.
“It’s a big investment, it’s about $1 billion to $1.2 billion because it is such, our view is as long as we have a significant stake and that could be as low as 50 percent, 40 percent, we have to balance (what) we have to give to other strategic investors,” he said.
