Market Event

A subsidiary of First Gen Corp. has entered into a five-year contract to charter a liquefied natural gas (LNG) carrier from a unit of Norway-based BW Gas Ltd. in line with the Lopez-led company’s offshore gas terminal project in Batangas.

Opinion

One of the key catalysts for FGEN is the development of its LNG terminal and the primary part of it is the floating storage regasification unit (FRSU). As mentioned above, FGEN has now made a deal with BW Gas Ltd. as its FRSU provider. The carrier, BW Paris, that will be provided has a nominal and peak gas send-out capacity of 500Mn standard cubic feet/day (MMscfd) and 700MMscfd, respectively. In comparison, Malampaya gas field has a production capability of 429MMscfd only, much lower than BW Paris. Given that, the potential production capacity of the LNG terminal not only covers the requirement of FGEN’s natural gas power plants but also opens up room for growth to supply other power plants and other industries as well. This is expected to boost bottom lines and could bring further upside to current price. The LNG terminal is on track to start commercial operations by third quarter 2022  (3Q22). FGEN is trading at 7.5x P/E full-year 2021 (FY21), below its mean of 10.3x.

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