LNG a safe bet

Price higher than aimed at but ex­perts con­fi­dent gas still an ex­cel­lent buy

Jamaica Gleaner - - NEWS - Arthur Hall As­so­ciate Ed­i­tor arthur.hall@glean­erjm.com

MA­JOR PLAY­ERS in Ja­maica’s en­ergy sec­tor are con­tin­u­ing to en­dorse the de­ci­sion to in­tro­duce liq­ue­fied nat­u­ral gas (LNG) into the coun­try’s en­ergy mix de­spite in­di­ca­tions that the sav­ing could be much lower than was ini­tially an­tic­i­pated.

Ad­dress­ing a Gleaner Ed­i­tors’ Fo­rum last Tues­day, rep­re­sen­ta­tives of the Univer­sity of the West Indies (UWI), Mona cam­pus, and Red Stripe, which have al­ready de­cided to go the gas route, ar­gued that sig­nif­i­cant sav­ings would be re­alised over the long term, and Bran­nen McEl­mur­ray, man­ag­ing di­rec­tor of New Fortress En­ergy, which is bring­ing gas to Ja­maica, was quick to agree.

McEl­mur­ray shot down claims that gas was be­ing landed in Ja­maica at US$12 to US$14 per one mil­lion Bri­tish Ther­mal Units (MMBTU) in­stead of the un­der US$10 per MMBTU which was widely touted as the price which would make the switch to LNG ben­e­fi­cial to the coun­try.

‘It didn’t hap­pen. We made a lot of tries to get it at US$8 and US$9 but it didn’t hap­pen,” Hopeton Heron, deputy di­rec­tor gen­eral of the Of­fice of Util­i­ties Reg­u­la­tion, told Gleaner ed­i­tors and re­porters.

“We could al­ways dream about US$8 and US$9 but it came in at about US$12 to US$13 and it is good,” added Heron.

McEl­mur­ray also ar­gued that Ja­maica is get­ting gas at a good price.

“As you think about pric­ing, it is im­por­tant to note that the price of LNG is less volatile than other fu­els, al­low­ing for more cer­tainty around sav­ings. Within the past two months, diesel has gone up sig­nif­i­cantly while the


cost of LNG stayed flat. That can rep­re­sent sub­stan­tial sav­ings for busi­nesses and con­sumers,” said McEl­mur­ray in re­sponse to ques­tions from The Sun­day Gleaner. But he re­fused to be drawn on the price at which his com­pany will be sup­ply­ing gas to the lo­cal en­ti­ties such as the Ja­maica Pub­lic Ser­vice Com­pany (JPS) and Red Stripe. “For spe­cific pric­ing, we’d rec­om­mend that you reach out to JPS and oth­ers ... as we can­not speak on their be­half. Please note that JPSCo con­verted Bogue from diesel to LNG be­cause it was ad­van­ta­geous to the Ja­maican con­sumer,” said McEl­mur­ray. “Aside from it be­ing a much cleaner fuel that sig­nif­i­cantly re­duces emis­sions, there is more price sta­bil­ity, and when gas is in­tro­duced into tech­ni­cal sys­tems, there are nearly al­ways lower main­te­nance costs, higher ef­fi­ciency and other ben­e­fits like free cold en­ergy dur­ing va­por­i­sa­tion.

“Red Stripe’s use of LNG will pro­vide sav­ings of over US$336,000 per an­num and will help the brewer meet its sus­tain­abil­ity goals. The pro­ject will re­duce green­house gas emis­sions by ap­prox­i­mately 6,000 tonnes per an­num. The plant’s steam out­put will also in­crease by 50 per cent, re­duc­ing fuel us­age over­all,” he added.

McEl­mur­ray noted that be­gin­ning this month, the UWI Mona cam­pus will re­duce its en­ergy costs by some J$52 mil­lion an­nu­ally and im­prove its en­vi­ron­men­tal foot­print with a 16 per cent re­duc­tion in green­house gas emis­sions.

Red Stripe’s Man­ag­ing Di­rec­tor Ri­cardo Nuncio had told the fo­rum that his com­pany ex­pects to save 50 per cent in its en­ergy cost an­nu­ally, while di­rec­tor of engi­neer­ing and deputy dean in the Fac­ulty of Sci­ence and Tech­nol­ogy at UWI, Dr Paul Aiken, said in­tro­duc­ing LNG is ex­pected to shave J$350

mil­lion an­nu­ally from its en­ergy bill.



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