The plant will initially operate on condensate liquid fuel to be supplied by Enron Capital & Trade Resources International Corporation under a Liquid Fuel Purchase Contract.

It will convert to natural gas from Camago-Malampaya through a Gas Sale and Purchase Agreement with the Shell Philippines Exploration B.V. when the gas becomes available.

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Total project cost is estimated at $890 million, inclusive of capital costs, working capital requirements, related transmission upgrades and financing, insurance and development costs.

(see project structure)

The financing is based on a 75% debt and 25% equity structure. Given the optimal risk allocation achieved in the course of developing the project, FGPC secured $680 million worth of limited recourse project financing on September 3, 1997 with favorable terms, notwithstanding the onslaught of the regional financial crisis.

The $680 million debt financing is broken down as follows:

• $190 million KFW-Hermes guaranteed loan facility;
  
  
• $160 million U.S. private placement;
  
  
• $110 million Philippine FCDU syndication;
  
  
• $78 million EIB loan facility; $66 million MEXIM-Mecib guaranteed loan facility;
  
  
• $26 million MEXIM loan facility; and $50 million revolving credit / working capital facility.

The second project of First Gas Holdings is the San Lorenzo Combined Cycle Gas Turbine Power which will generate the remaining 500 megawatts. Commercial operation scheduled for the first quarter of 2002. The project is estimated to cost approximately $450 million.

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A New Era

By November 1999, FGPC will usher in a new era in the Philippine power industry. Upon its commissioning, the 1,000 megawatt gas-fired power plant will mark the entry into the energy sector of new, highly efficient combined-cycle power plants capable of burning environment-friendly natural gas from the country’s first commercial gas field.

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We, at First Gas, recognize that in the pursuit of our business objectives, we shall provide superior service to our customers, protect the safety and health of our employees and the communities affected by our operations, as well as preserve and enhance the environment.

We shall implement an integrated quality, environment, safety and health management system that will constitute an integral part of our performance in energy-related businesses, particularly in our core business, power generation, and which shall be a prime responsibility of all personnel at all levels.
Specifically, we shall continually:

Comply, as a minimum, with all applicable laws and regulations in the country and where practicable, improve on the specified performance standards;

• Take all the necessary measures to ensure the delivery of superior service to our customers;

• Cooperate fully with relevant regulatory/enforcement agencies;

• Improve our management of quality, environment, safety and health to reduce work-related illnesses/accidents, environmental emissions, effluents and wastes, and promote the efficient use of energy, water and other resources, while ensuring customer satisfaction;

• Assess the impact on environment, safety and health of its operational activities and adopt the right mitigating measures using available and appropriate technologies;

• Require all our contractors to accept our quality, environment, safety and health standards;

• Foster a common understanding of business related quality, environment, safety and health concerns among shareholders, employees, customers, suppliers, regulatory bodies, host communities, and public interest groups; and

• Review our objectives to ensure that our customer’s requirements are satisfied.     

We shall take the necessary measures to ensure that this quality, environment, safety and health policy is understood, observed and integrated in our way of life.

First Gas:

Committed to Quality, Environment, Safety & Health

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First Gas Holdings Corp.