First Gen settles dispute with Malampaya gas consortium
Friday, March 24, 2006
Cecille YapXFN-Asia
FIRST GEN Corp. said unit First Gas Power Corp. and the Malampaya Gas consortium have settled their dispute over First Gas' 148-million dollars worth of contracted but unused natural gas from the Malampaya gas field in western Philippines.
First Gen said the liabilities incurred by First Gas would be passed on to client Manila Electric Co. (Meralco).
Under the terms of the compromise agreement, First Gas and the Malampaya group recognized that the total annual deficiency of First Gas is 148 million dollar minus the firm's recognized prepayment of 13.3 million.
First Gas will pay the amount through quarterly installments, with final maturity on December 2009. The agreement also allows for prepayment of the obligation.
The Malampaya Gas consortium is composed of Shell Philippines Exploration BV, Chevron Texaco and the state's Philippine National Oil Co.
Since First Gas supplies electricity to affiliate Meralco, the country's largest power distributor, it will have to seek Meralco's consent before the settlement with Malampaya takes effect.
First Gen said that under the power purchase contract between First Gas and Meralco, all fuel and fuel-related payments were passed on to Meralco.
"Hence, payment obligations of First Gas under the settlement agreement are passed on to Meralco on a back-to-back and full-pass through basis," First Gen said.
(One dollar = 51.11 pesos)
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posted by philpower @ 10:15 AM,
