MANILA - Philippine power producer First Gen Corp said on Thursday the construction of its LNG terminal, initially estimated to cost $274 million, will begin next month.

First Gen's LNG import terminal to be constructed in Batangas province, near its gas-fired power plants, is among five such projects to receive permission from the Department of Energy.

"Commencing the construction of the country's first LNG terminal next month...puts the company in a good position for expanding its gas portfolio especially after the recent DOE coal moratorium," First Gen President Francis Giles Puno said in a statement.

The terminal will allow First Gen to ship LNG to the Philippines by the third quarter of 2022.

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The Southeast Asian country will need to import LNG to feed existing power plants with a combined capacity of about 3,200 megawatts as its Malampaya gas field in western Philippine waters is expected to run dry by 2027, based on the government's latest projection.

First Gen's partner for the project, which involves using a Floating Storage Regasification Unit, is Japan's Tokyo Gas Co Ltd, which will take a 20 percent participating interest in the construction and operation of the terminal.

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