JPS to spend $50b on Old Harbour plant

JPS to spend $50b on Old Harbour plant

BY STEVEN JACKSON Business reporter

Saturday, February 07, 2015

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POWER utility, Jamaica Public Service Company Limited (JPS) has announced that its planned 190-megawatt plant at Old Harbour will cost $50 billion financed through a mix of debt and equity.

The company aims to start construction this year with completion set for the fourth quarter of 2017.

"We are very excited about this project. It will cost north of $50 billion and it will require a lot of work for me to do to raise the amount," stated Dan Theoc, chief financial officer at JPS in his presentation at a media briefing on Friday at the JPS head office in Kingston.

JPS last week received formal approval from the Jamaican Government for its proposal to proceed with the construction of the new plant to replace its existing units at the Old Harbour power station.

JPS is pursuing fuel diversification of its power generation fleet (new and existing), consistent with the Jamaica National Energy Policy, to reduce dependence on liquid fuels such as diesel and heavy fuel oil, in favour of lower cost natural gas.

"Our likely partners will be development finance institutions. We are talking with several banks now including the Inter-American Development Bank, the International Finance Corporation, and the European Investment Bank. We are looking to 70 per cent of the funding through debt and 30 per cent through equity," stated Theoc.

JPS will be reporting developments to the Electricity Sector Enterprise Team (ESET) established by the Jamaican Government.

Last year, JPS undertook a market study showing that liquefied natural gas (LNG) and natural gas liquids (NGL) such as propane and ethane, are viable options for power generation and can realise significant reduction in the cost of electricity.

The main receiving terminal for the gas will be located at the Old Harbour project. The Front End Engineering Design (FEED) study has been initiated and is underway; JPS has initially determined that an onshore terminal is cost-effective, compared to the larger capacity and productivity of larger FSRU-type terminals.

JPS will also seek to convert the existing Bogue plant in Montego Bay to gas fuel as expeditiously as possible.

"An Independent engineer has been retained for the Bogue conversion. JPS will present its recommendation to proceed with the project to the Jamaican Regulator, the Office of Utilities Regulation (OUR), at the end of February 2015. Pending regulatory approval for the costs of the gas conversion, the Bogue project is expected to enter construction in Q2 of 2015 and would begin use of gas fuel in Q1 of 2016 (possibly sooner),"stated JPS in a release on Thursday.

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