FIRST GEN Corp. of the Lopez Group is setting aside about $530 million in capital expenditures (capex) this year to mostly fund geothermal, gas and hydro projects.
During the stockholders’ meeting held Wednesday, First Gen Chief Financial Officer Emmanuel Singson said $280 million will be utilized by Energy Development Corp. (EDC), $120 million for its LNG (liquefied natural gas) terminal and $60 million for its 100megawatt (MW) pumped-storage project.
“In 2021, we are expecting to spend $530M in capital expenditures mainly driven by EDC, the LNG terminal, and the Aya Pumped Storage Project,” said Singson.
EDC, he said, is targeting a higher capex this year and is planning to spend about $280 million to catch up on its drilling and investments, as the Covid-19 pandemic resulted in the postponement of key activities last year.
The amount also includes spending for its planned binary growth projects—3.6MW Mindanao 3 and the 29MW Palayan Bayan project.
“For First Gen’s LNG terminal, the company has earmarked about $120 million in capex in 2021 as it begins construction at the site to be ready to declare commercial operations by third quarter of 2022. For Project Aya, we expect to spend about $60 million this year as we continue development work for the project,” said Singson. The development of First Gen’s Interim Offshore LNG Terminal (IOT Project) in the First Gen Clean Energy Complex in Batangas is “on track.”
The completion of the LNG Terminal is very timely, given that the Malampaya gas field appears to be declining more quickly than anticipated, the company said.
Officials also said the development of the LNG Terminal will pave the way for the Santa Maria gas project, a 1,200-MW natural gas-fired power plant that could go online by late 2024 or early 2025.
Meanwhile, the 100-MW Lake Aya pumped storage project is envisioned to be the county’s pioneering variable-speed pumped storage facility. The preliminary assessment and feasibility study have been completed, officials said. The company booked P4.04 billion in net income at end-March this year, up by 28.9 percent from the same period last year.
“We expect recurring net income to be flat or slightly higher in 2021 compared to 2020. We expect better performance from our natural gas platform in 2021 driven by the full-year ASPA contract of Avion, higher WESM prices, as well as the enactment of the CREATE law, which lowers the income tax rate from 30 percent to 25 percent,” said Singson.
“This is expected to be partially offset by higher O&M [operation and maintenance] costs at EDC as they target to catch up on drilling and maintenance activities this year.”
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