The two companies, which have been considering the alliance in the project since 2018, plan to construct and operate a Floating Storage & Regasification Unit (FSRU) near Batangas City and onshore gas receiving facilities, with an aim to introduce LNG to the Philippines as early as in the second half of 2022.
The Philippine government has approved First Gen's LNG terminal project, along with three other projects.
The Southeast Asian country will need to import LNG to feed existing power plants with a combined capacity of about 3,200 megawatts (MW) as the Malampaya gas field in western Philippine waters is expected to run dry by 2027.
Under the latest agreement, Tokyo Gas will take a 20% participating interest in the construction and operation of the project, the company said, declining to give an estimate of construction cost.
First Gen is a power generation company of the Lopez Group, one of the largest conglomerates in the Philippines, and is the largest natural gas consumer in the country, holding about 60% of gas-fired power generation capacity.
Under the long-term vision unveiled last year, Tokyo Gas is targeting to triple its overseas profits by 2030 to account for 25% of its total operating profit.
(Reporting by Yuka Obayashi, editing by Louise Heavens)