Future Energy Source Company Limited (FESCO) is addressing what managing director Jeremy Barnes has described as a minor regulatory issue at its liquefied petroleum gas (LPG) plant in Bernard Lodge, St Catherine, after the National Environment and Planning Agency (NEPA) denied its application for an environmental permit to continue operating the facility.

Earlier this month, NEPA denied FESCO’s application to renew the permit for the Bernard Lodge-based petroleum storage and dispensing facility which handles LPG, due to what NEPA said was the “non-submission of proof of lease agreement or ownership of site”.

The application was submitted in November 2023 and marks the first time FESCO has applied for a permit renewal for the Bernard Lodge facility since acquiring the assets of Wilson Beck LPG Limited in April 2023. The plant, originally launched by Wilson Beck in May 2020, is a central asset in FESCO’s push into the LPG market which is dominated by Massy Gas, the owners of the Gas Pro and IGL cooking gas brands. Massy controls about 70 per cent of the market through the two brands.

The property in question, where FESCO’s LPG plant is located, is owned by the Sugar Company of Jamaica, according to documents pulled from the Office of Titles Jamaica, but lease agreements are officially registered and stamped on the property’s title. Prior to FESCO’s occupancy of the property, Wilson Beck had a lease arrangement in place.

On Wednesday, Barnes shared that FESCO is actively engaging with NEPA to finalise the necessary documentation for its Bernard Lodge facility.

“We are simply renewing a previously approved permit. NEPA apparently misplaced the lease document, and we are in dialogue to submit it [Thursday],” Barnes told the
Jamaica Observer. Sources close to the company, however, indicated that FESCO may seek to acquire the lands over time.

Despite this brief delay, FESCO remains confident in its growth and is strengthening its presence in the LPG industry.

In April 2023, FESCO made headlines with the acquisition of Wilson Beck’s assets, laying the foundation for its entry into the cooking gas market. The Bernard Lodge plant serves as the hub for its cooking gas brand, FesGas. FESCO’s venture into the LPG market has outperformed initial expectations.

In its first year, FESCO reported $590 million in LPG sales, contributing just over two per cent to its total revenue of $28.7 billion for the 2023/24 financial year. The company’s main revenue driver remains its wholesale and retail petroleum business, which is distributed through a network of more than 20 service stations across Jamaica.

“For every business, it takes time to build momentum, but we were pleasantly surprised by how quickly we gained traction,” Barnes said in a previous interview with
Business Week. While the company officially entered the LPG market in April 2023, significant growth didn’t occur until October.

FESCO has been proactive in building its LPG infrastructure, investing $1.4 billion in the 2022/2023 financial year to establish additional filling plants at key locations, including Naggo Head, Discovery Bay, and Stony Hill, alongside Bernard Lodge. The company has since scaled back its capital expenditure to $270 million for the 2023/2024 financial year but remains committed to expanding its LPG footprint.

While FESCO is ironing out the final regulatory details, the company is positioning itself as a key player in Jamaica’s LPG market, buoyed by a growing customer base and strategic investments. However, Barnes noted that growth in the LPG segment will require further capital to maintain competitiveness and meet increasing demand.