First Gen holds off LNG purchase pending Meralco assurance
LOPEZ-LED First Gen Corp. said that its subsidiaries may not proceed with the purchase of a new liquefied natural gas (LNG) cargo without assurance from Manila Electric Co. (Meralco) regarding the recovery of full costs and approval for LNG usage.
“Without a binding commitment from Meralco, First Gas Power Corp. and FGP Corp. will not proceed with the purchase of the said new LNG cargo,” the company told the local bourse on Wednesday.
“Thus, in the absence of Malampaya gas, the Santa Rita and San Lorenzo power plants will be unable to utilize LNG, and have no choice but to operate on liquid fuel,” it added.
First Gen is seeking bids for a fourth LNG cargo with a target delivery in March.
Meralco Regulatory Affairs Head Jose Ronald V. Valles told reporters on Monday that the company is constrained to not pay for certain LNG-related costs due to the absence of clearance from the Energy Regulatory Commission (ERC).
“We told ERC to please reply to our letters as soon as possible so that we can get back to First Gen right away if they can proceed to order. First Gen needs our reply because there is a period in which it must follow,” he said partly in Filipino.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
