MONTEGO BAY, St James – Venezuela and Jamaica yesterday signed a Memorandum of Understanding (MOU) which will allow Kingston to buy 2.5 million tonnes of Liquid Natural Gas (LNG) annually from Caracas – a development that will give impetus to Jamaica’s plan for major developments in the bauxite/alumina and electricity generation sectors.

The agreement, signed at the Half Moon Hotel in Montego Bay, by Jamaica’s Prime Minister Portia Simpson Miller and Venezuelan President Hugo Chavez, came two weeks after Trinidad and Tobago, which was to sell Jamaica 1.15 million tonnes of LNG, backed out of the deal.

The agreement with Venezuela yesterday was immediately welcomed by the Jamaica Manufacturers’ Association, which praised the Government for its swift response after the action Caricom partner Trinidad and Tobago.

At the same time, the association urged the Government not only to negotiate for related finished products from Venezuela or other extra-regional sources, but also to grant a waiver of the Common External Tariff on such products to ensure consumers benefit from the most competitive prices.

Last month, Trinidad and Tobago announced that it was unable to honour an agreement, signed two years ago, to supply Jamaica with low-cost liquefied natural gas.

Energy Minister Phillip Paulwell, who was present at yesterday’s signing, said a top level team of technocrats from Jamaica and Venezuela has been established to hammer out the details of the agreement.

The deal, Paulwell added, was expected to be in line with agreements between Caracas and Kingston under the PetroCaribe accord.

Jamaica is among 13 Caribbean Community (Caricom) states that signed the PetroCaribe agreement in 2005, under which countries are being offered a facility to cushion the impact of high international energy costs through a deferred payment scheme.

Paulwell told reporters yesterday that Venezuela would start supplying LNG to Jamaica in 2009, at which time the necessary infrastructure will be in place to accommodate the supplies.

Jamaica – with an oil bill of $1.6 billion last year – has been pursuing the idea of energy conservation programmes under which the island’s bauxite plants, the light and power company and other big companies would begin using natural gas in place of oil.

Paulwell, in expressing pleasure at the signing of the MOU with Venezuela, expressed confidence that the LNG supplies from that country would meet the needs of the bauxite/alumina and electricity sectors.

“The supplies that we would be getting from Venezuela would adequately meet the needs of both the bauxite/alumina and electricity generation sectors; and in that regard, we are very grateful,” said Paulwell. “This is a very great day for us, in that we are now satisfied that all the gas that we are going to need will be available to Jamaica.”

Chavez, who arrived in the island early yesterday en route to the improverised country of Haiti, also held talks with Simpson Miller and several other Government officials.

Simpson Miller told reporters that aside from the fruitful energy talks, the Venezuelan president has also promised to assist the country in the provision of health care.