BW Group has signed a contract with a subsidiary of First Gen Corp to charter a floating storage regasification unit (FSRU) for a terminal in Batangas province in the Philippine island of Luzon. The FSRU, which has a storage capacity of 162,400 cubic metres, will be chartered for five years, according to a stock exchange statement issued by First Gen on April 6.

BW Group is a leading marine transporter of liquefied natural gas (LNG) with a fleet including very large gas carriers (VLGCs). The group was formed in 2003 when Hong Kong-based World Wide Shipping acquired Norwegian company Bergesen to form Bergesen Worldwide. Privately held by the Sohmen family, the group is involved in shipping, floating infrastructure, deep-water oil and gas production, and new sustainable technologies.

The FSRU to be chartered is the LNG carrier BW Paris, which has a peak gas send-out capacity of 700 million standard cubic feet per day. It will serve the offshore gas terminal project in Batangas. Importing LNG is a matter of urgency for Luzon as the reserves of the offshore Malampaya gas field will be depleted by 2027, creating a gas shortfall for local power plants.

Last September the Department of Energy awarded First Gen a permit to develop the LNG terminal near Batangas City. Floating LNG terminals can be set up much faster than onshore terminals, and Batangas is expected to be online in the second quarter of 2022.

First Gen signed a joint cooperation agreement with Japan’s Tokyo Gas to partner in the ownership and operation of the offshore terminal.

“FGEN LNG believes the project will play a critical role in ensuring the energy security of the Luzon Grid and the Philippines, particularly as the indigenous Malampaya gas resource is expected to be less reliable in producing and providing sufficient fuel supply for the country’s existing gas-fired power plants,” First Gen says.