JPS: LNG still the best option to oil

JPS: LNG still the best option to oil

BY CONRAD HAMILTON Observer senior reporter

Tuesday, May 08, 2012

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THE Jamaica Public Service (JPS) has reiterated that Liquefied Natural Gas (LNG) is the preferred option as Jamaica explores alternatives to electricity generation fuelled by oil.

Valentine Fagan, the managing director of South Jamaica Power Company, made the pronouncement while addressing the weekly Jamaica Observer Monday Exchange. That company was set up by the JPS to preside over the construction of a 360-megawatt plant in Old Harbour, St Catherine. According to JPS, that facility, which is slated to come on stream in December 2014, will replace the inefficient and aged Old Harbour power-generating plant.

"There is really not much difference in terms of coal versus LNG, just that it is possible to bring on the LNG plant much faster. Coal plants take five years for construction, in addition to the many environmental issues," said Fagan as he addressed reporters and editors at the Observer's Beechwood Avenue headquarters.

"If we don't add capacity, and if we assume modest growth in the economy, we would have breached the 25 per cent reserve margin, and would find it difficult to supply peak demand. This would result in widespread outages," Fagan added.

For several months, some stakeholders in the energy sector have been questioning moves by the JPS and the Government to introduce LNG. Some of the observers have suggested that coal would be a less-expensive option. Others have suggested that LNG prices will begin to skyrocket, and have also indicated that Jamaica — based on its size and relatively low demand for LNG — will encounter problems sourcing the commodity from suppliers, who will be keen on selling the product to countries with much higher demand.

Just last week, a Government committee, which was established to manage the tender process for the proposed LNG floating regassification facility, disclosed that three international companies had expressed interest in constructing the floating unit from which LNG will be supplied to the JPS and other large consumers, such as bauxite companies.

"By way of context, the current peak demand in Jamaica is 630 megawatts. At one stroke, this 360-megawatt plant will replace over 80 per cent of our base loaded plants, and more than 60 per cent of the peak demand. This is very significant, and this is happening in one stroke. The idea is to replace the 40-year-old, 292 megawatt of existing plant primarily located at Old Harbour and the famous B6 located at Hunt's Bay," Fagan had said at a press conference convened by the JPS earlier this year.

While not naming the contractor who will be engaged to build the plant, Fagan explained that the proposed 27-month project will result in the creation of 1,200 jobs for both skilled and unskilled persons.

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