For implementation of Local IP Access(LIPA) feature in a femto cell network, collocated LGW is used. It basically acts as a PGW but just connected to a local network. So when ue wants to connect to this local network, the data path is UE-HeNB-LGW-Network. It is a offloading method to reduce core network traffic. But signalling messaging are done by core network.
Now LGW is connected to SGW via S5 interface. It has a mostly dormant tunnel ,which is only used when a data packet for a IDLE ue arrives from the local network to LGW . After finding that UE is idle LGW buffers the data and sent a Dummy packet to sgw to trigger paging. SGW informs MME , which informs HeNB to awake the idle ue. after Radio bearer is established. LGW sends the buffered data.
To SGW, the whole process is transparent in the sense that it does not know that it is a LGW and as if a pgw was sending data to initiate paging.