LNG Archives - Page 4 of 11 - SolarBuzz Jamaica

With question mark over Abengoa…

November 27, 2015 Webmaster

JPS to open discussions with other renewable vendors

The Jamaica Public Service (JPS) yesterday announced that it will be engaging in discussions with other renewable vendors to ensure execution of the planned energy 190 MW Power Plant in Old Harbour, St. Catherine.

Chief Executive Officer, Kelly Tomblin in a press release advised the public that Spanish renewable energy and engineering firm Abengoa has filed for protection from creditors – an initial step towards filing for bankruptcy. The company was recently announced as the preferred bidder to construct the combined-cycle plant in Old Harbour.

“While JPS notes the development with regret, it is fully prepared to activate its alternative plans to ensure the execution of the project, which will replace the present Old Harbour Bay Power Station, while adding more Liquefied Natural Gas to the country’s energy mix,” Tomblin stated.

“We will be having dialogue with Abengoa — but JPS remains undaunted by the news. As a responsible corporate entity, our company has been in full preparation mode for any type of challenge regarding the completion of this project. We will not be derailed from our mission to bring real change to the energy sector and by extension, to Jamaica,” she continued.

The CEO reportedly stated that JPS has been eyeing other vendors since the announcement of the Abengoa’s financial situation.

Abengoa, which reported debt of ¤8.9-billion in its third quarter financials, began bankruptcy protection proceedings to avoid what could be one of Spain’s largest insolvencies.

The figure could be doubled when including ¤2.1 billion in funds it owed to suppliers and ¤5.9 billion of debt the company has in subsidiaries it said could potentially be sold. According to reports, the company has filed for protection from creditors with hopes of reaching a deal on its debts by March.

According to Tomblin, Abengoa was selected based on its wide ranging and impressive technical expertise. The company has been touted as one of the world’s top builders of power lines transporting energy across Latin America and a top engineering and construction business, making massive renewable-energy power plant.

The light and power company also had the understanding that Abengoa’s financiers were committed to the company for the long term.

“JPS wishes to assure its customers and all stakeholders that the 190 MW project remains on track for the plant’s commissioning in 2018.The Company will keep stakeholders informed as events unfold,” she said.

Jamaica Observer

Electricity Government JPS LNG News Oil

UPDATE 3-Spain’s Abengoa starts insolvency proceedings, shares dive

November 25, 2015 Webmaster

* Abengoa has 4 months to reach deal with creditors

* Shares plummet 54 pct, bonds virtually worthless

* Abengoa’s bankruptcy would be Spain’s largest on record (Adds Abengoa removed from Ibex, details on company)

MADRID, Nov 25 Spain’s Abengoa started insolvency proceedings on Wednesday after a potential investor said it would not inject fresh capital into the energy firm, sending its share price tumbling by 54 percent.

Under Spanish law, companies can enter into pre-insolvency proceedings, giving them up to four months to reach an agreement with creditors to avoid a full-blown insolvency process and a potential bankruptcy.

Failure by Abengoa to reach such a deal could lead to Spain’s largest bankruptcy on record. The company employs around 24,000 people worldwide.

Spanish and international banks’ total exposure to Abengoa stands at around 20.2 billion euros ($21.4 billion), including financing for projects, a source familiar with the matter said at the end of September.

The Seville-based engineering and renewable energy firm, which has biofuel and solar-heated power plants in the United States, has been struggling for a year with high debts but the situation became unsustainable in July. It first cut its 2015 targets and stepped up an asset sales plan on July 31, only to announce a share issue days later.

Since then, the company’s market value has tumbled by around 85 percent, hit by uncertainties over whether creditor banks would agree to back the issue.

The shares plummeted by 69 percent when trading resumed following a more than three-hour suspension on Wednesday morning. They closed down 54 percent, wiping out around 470 million euros in market value on the day.

The stock market operator said Abengoa would be removed from Spain’s blue-chip index Ibex as of Nov. 27.

Bonds also lost most of their value.

Abengoa earlier confirmed that Gonvarri, a unit of privately-held industrial group Gestamp, had backed away from a plan to inject around 350 million euros into the firm.

“The company will begin the negotiating process with its creditors with the aim to reach an accord to guarantee the financial viability under the Article 5 of the Bankruptcy act, which the company intends to request as soon as possible,” Abengoa said in a statement.

Abengoa has been trying to find new investors since early August, when it announced a 650 million euro rights issue of new shares to cut gross debt of some 8.9 billion euros.

Gonvarri’s interest was conditional on banks underwriting the issue and it had asked the banks to inject 1.5 billion euros in to the company, sources told Reuters late on Tuesday.

Earlier this month, Abengoa’s auditor Deloitte said the group faced significant risks and its future depended heavily on the proposed investment deal with Gonvarri.

https://solarbuzzjamaica.com/jps-announces-preferred-bidder-for-old-harbour-plant/

Reuters.com

Alternative Energy JPS LNG News Oil

JPS Announces Preferred Bidder For Old Harbour Plant

November 20, 2015 Webmaster

The Jamaica Public Service Company Limited (JPS) has announced the selection of Spanish firm Abengoa as the preferred bidder to build the 190 megawatt Combined Cycle plant in Old Harbor, St Catherine.

The announcement follows the approval by the Electricity Sector Enterprise Team for the company to start negotiations with US-based New Fortress Energy for the supply of natural gas to the plant.

The JPS says once contracted, Abengoa will be responsible for the design, engineering and construction work on the plant.

It will be built close to company’s existing power station in Old Harbour Bay.

The JPS says it is in the process of procuring the necessary permits for the construction of the plant.

It says as part of its public education, it has shared the Environmental Impact Assessment on its website and will host a public consultation meeting next Tuesday in Old Harbour Bay.

The JPS says the gas terminal and the new gas-fired power plant will allow it to retire 220 megawatts of existing oil-fired steam generation units at Old Harbour and Hunts Bay in 2018.

It says this will ultimately result in a reduction of over 1.2 million barrels of oil per year and allow for power generation below 13 United States cents per kilowatt hours.

The Gleaner

Electricity Energy Saving JPS LNG

LNG Suppliers Selected – Power Plant In Operation By 2018

November 13, 2015 Webmaster

Head of the Electricity Sector Enterprise Team (ESET) Dr Vin Lawrence says there was a vast number of credible bids that were put forward for the supply of natural gas to the new power plant to be built by Jamaica Public Service Company (JPS).

New Fortress Energy, the same entity which won the bid to supply gas to the Bogue power plant in Montego Bay, has been selected as the entity to supply LNG to the new plant, on which construction is expected to begin by the second quarter of next year. The arrangement will see New Fortress installing the facilities to receive, store and re-gas the fuel for use at the new 190-megawatt gas-fired plant at Old Harbour.

“Six entities submitted 16 variations of proposals and we were quite delighted at this because we have gone through 15-20 years of attempting to get LNG to Jamaica without much success, and on this RFP, we have had six credible entities submitting 16 variations of supply proposals,” Lawrence said.

The ESET chair, who was addressing a Jamaica House press briefing at the Office of the Prime Minister yesterday, also announced that the JPS has selected Spanish firm Abengoa to construct the new plant.

Lawrence said the agreement is for New Fortress Energy to build a terminal and supply the JPS with 200,000 metric tonnes of LNG per annum. New Fortress Energy will build, own and operate the plant which Lawrence said must be expandable.

In Ja’s Best Interest

The company will spend more than $200 million on the terminal, which is expected to be constructed at Rocky Point, Clarendon.

“We have been trying for 20 years to bring natural gas to Jamaica, and so, we believe it is also in our interest that we have a terminal facility that can expand and grow,” he said.

The gas plant is due to be finished by the fourth quarter of 2017 and the power plant is due to be ready at the beginning of 2018.

With Jamalco indicating that it is reviewing its decision on whether it will go ahead with the building of a coal plant or switch its plans to using natural gas, Lawrence said the demand for LNG could be about 500,000 metric tonnes per year.

Schedule Not Affected

Lawrence said the bauxite-producing company is being allowed another two to three weeks to “have discussions with the possible gas supplier for a final decision to be taken”.

“This period will not affect the scheduling that we had proposed for Jamalco. If they shift to gas, we would have a two-year rather than a three-year construction period and the capital cost would be significantly less,” Lawrence added.

The new building of the JPS power plant represents part of an effort to lower electricity costs on the island. The plant will replace 292 megawatts of heavy fuel oil power plant at Old Harbour in St Catherine, and will be combined with energy from renewable sources and cogeneration facilities from Pan-Caribbean Sugar Company and bauxite companies.

The final electricity price to the grid will be less than US$0.13 cents per kWh, the ESET head said, which would mean at least a 30 per cent cut in light bills.

Lawrence said Jamaica has been looking at getting one million metric tonnes per year, and that New Fortress Energy is expected to construct a terminal that can supply the 200,000 metric tonnes that the JPS requires.

He said the demand for LNG from other sources would determine how quickly the facility is expanded.

Technical assistance was provided by the Galway Group and Hatch Mott McDonald, two reputable international firms.

Critical issues such as the security of supply, capability of delivering the project, ability to expand the terminal, ability to meet the power plant schedule, and a commitment to achieve a timely financial close were considered in selecting New Fortress Energy as the preferred bidder.

The Gleaner

Electricity JPS LNG News

General Electric To Retrofit Bogue Power Plant

June 26, 2015 Webmaster

Dr Vincent Lawrence, head of the Electricity Sector Enterprise Team (ESET), says the Jamaica Public Service Company (JPS) will conclude an agreement with General Electric for the retrofitting of its Bogue power plant in Montego Bay to be fired by liquefied natural gas.

Lawrence said the expected supply cost for LNG to the plant is US$14 per million BTUs, which is about half the US$27 unit cost to supply the plant with diesel, he added.

“We are very excited,” said Lawrence on Tuesday at his third press conference as chairman of ESET – a special body created to execute projects aimed at reforming Jamaica’s electricity market. “We are satisfied that the project is on target for the first quarter of 2016.”

His announcement puts to rest speculation that JPS was still considering a flirtation with propane as an interim fuel before moving to LNG.

The contract being finalised with General Electric is the second major announcement for the 115MW Bogue project, following last week’s disclosure in a market filing by JPS that it had hired Fortress Energy, another American company, to supply gas for the plant.

Last night, JPS said that General Electric would retrofit the plant for LNG, while Fortress would develop the regasification and storage facility. Fortress will also supply the gas.

JPS says the deal with General Electric is valued at US$15 million. However, the power utility was mum on the Fortress transaction, nor would it disclose the price at which Bogue would supply power to the grid under the partnership.

Previously, the company had floated US$80 million as an indicative cost for the full project, but that was before it found partners for the jobs.

Lawrence also announced Tuesday that JPS has got 12 expressions of interest through its request for proposals in June for development of a 190MW plant in Old Harbour, St Catherine, each of which has been issued with material to prepare for bidding on the contract.

Proposals have come in from Jamaica’s state-owned refinery, Petrojam, Royal Dutch Shell, British Petroleum, Clean Core and Fortress Energy. Clean Core was runner-up to Fortress Energy on the Bogue bids.

The plans for Old Harbour have grown more ambitious since the project was first mooted. Now ESET sees itself as the fulcrum for the development of a regional gas hub for the Caribbean that was first discussed in Jamaica during talks with US Energy Secretary Dr Ernest Moniz during President Barack Obama’s official visit in early April.

“Jamaica is trying to become the hub for gas distribution in the region. It is one of the things we are very interested in,” said Lawrence.

“In the request for proposals, we have requested that they provide a perspective on how Jamaica could serve the region. That is one of the things we will be assessing,” he said.

Discussions about such a hub flowed from a study done by Inter-American Development Bank on the regional demand for natural gas and the economics around consistent supply.

Bogue is being converted from automotive diesel oil to LNG. Lawrence said JPS had also looked at propane and ethane as fuel options, but finally decided to convert to LNG immediately.

“They have had meetings with General Electric and GE is on track to carry out conversion. The contract is to be signed early July,” said Lawrence.

The plant conversion will take 26 weeks, or just about six months, from the award of contract.

JPS confirmed the timeline of the first quarter of 2016 for the conversion to be completed.

Lawrence said Fortress will ship gas to the plant weekly from its Miami, Florida, facility to the port in Montego Bay.

For the pipeline to be built by Fortress from the port to the Bogue plant, the preliminary design, engineering, agreements with the Port Authority of Jamaica and authorisation from NEPA are being pursued, the ESET chairman said.

avia.collinder@gleanerjm.com

http://jamaica-gleaner.com/article/business/20150624/general-electric-retrofit-bogue-power-plant

Electricity Government LNG News

Paulwell seeks legal advice on possible challenge to OCG

May 6, 2014 Webmaster

ENERGY Minister Phillip Paulwell

ENERGY Minister Phillip Paulwell is seeking legal advice from the solicitor general with a view to taking Contractor General Dirk Harrison to court over his report on the bidding process to implement the 381-megawatt energy project, according to a well-placed source.

Consultations, the newspaper was informed, are already underway between the solicitor general and the embattled minister, who is fighting to clear not only his name, but to repair any reputational damage that occurred to the country with the Inter-American Development Bank (IDB) reversing its position to support the 381MW project as a result of the contractor general’s report.

The Jamaica Observer was, however, unable to reach Paulwell last night for a comment.

The basis on which the minister can seek judicial review of the contractor general report lies in the legal response of the Office of Utilities Regulation (OUR) to the Office of the Contractor General’s special investigation report, the source said.

The OUR legal response, posted on its website, contends that the OCG erred in using the Government of Jamaica guidelines for consultancy tenders during its probe, whereas it should have used guidelines for Works Tenders. This, the source contends, is a serious error in law.

The OUR legal response further contends that the OUR conducted two distinctly different processes: an informal exploratory process in which expressions of interest were received, followed by a formal legal tender.

The source said that Energy World International (EWl), the company that eventually emerged as the preferred bidder to undertake the project, received Cabinet approval to be included after the deadline of the informal preliminary process but well before the commencement of the formal tender.

The sources said these two facts provided the foundation to apply for judicial review.

The project is to be built with a mix of EWI equity and multilateral funding. The imprimatur of the IDB is key to receiving the go-ahead for that funding.

It was Harrison’s first major report since assuming office in 2013. The report was issued on the same day that he issued the long-awaited Richard Azan report. But this isn’t the first time in recent years that a Government minister will be taking the OCG to court.

Transport Minister Dr Omar Davies last year sought leave for judicial review of a decision by the contractor general to monitor an oversight body set up by the minister to advise on the award of contracts to a public body.

The minister, however, withdrew the challenge.

Jamaica Observer;

Electricity Government LNG News

Bicknell Reserves Comment On EWI

May 2, 2014 Webmaster

Chris Bicknell, CEO of Tank-Weld Group.

A second effort at firing up the natural gas project seemed headed to derailment at midweek, but the candidate that would benefit from the collapse is keeping silent on its own readiness to step in.

A licence was issued to Energy World International to build a 381 MW LNG-fired plant on April 14, but the company has failed to secure backing for the project from the Inter-American Development Bank (IDB), which indicated that it viewed the procurement process that selected EWI as flawed.

EWI missed the payment window for its performance bond of US$36.85m, which was due to the Office of Utilities Regulation on April 24, but said it had made the payment on Wednesday. The company previously paid US$7.37m as a bid bond on its US$737m project. It still needs to tie down financing for the full project.

The next candidate in line to do a deal with the OUR is Energise Jamaica, a consortium led by Tank Weld Group and Musson Jamaica.

“Our Energise group has decided not to comment at this time. We want to see how the government is going to play this out. So we have decided to wait on the Government’s next move in this process.” said Tank Weld CEO Chris Bicknell on Wednesday.

HIGHER PRICE

Energise’s bid would deliver electricity to the grid at a more expensive price, US$0.1827. EWI’s project is predicated on pricing of US$0.1288. The first candidate, which failed to pay over its bond and lost out on the deal, Azurest-Cambridge, had proposed to deliver power at US$0.1390.

The OUR said last October that Energise proposes to run its plant initially on heavy fuel oil at a price of US$0.2154 for one to two years after which it expects to switch to natural gas.

Technically, Azurest’s second bid option, a heavy-fuel oil plant, also beat out Energise’s natural gas price, but it’s unclear whether the OUR is obliged to offer the American company another shot at a deal. A request for clarification was unanswered up to press time.

Energise is yet to disclose its expected sourcing of natural gas and how it will finance its project. Bicknell declined to answer those questions Wednesday as the EWI issue continued to play itself out.

Energise said previously that it has mobilised equity backers willing to put up capital in excess of US$60 million, and that its project would lead to 25 per cent savings on electricity costs.

Energy Minister Phillip Paulwell made it clear on Tuesday that he was willing to go to the mat for EWI and would seek to sway the IDB’s decision to a yes on financing for the Hong Kong-based but Australian-connected firm.

The licence issued to EWI on April 14 was amended to remove a stipulation that the Energy Minister could take over the project during the construction phase if work on the plant had stopped for more than two days, but it maintains aspects of the ‘step-in’ or takeover provisions after the plant has been commissioned. These provisions allow the minister to acquire the plant if it is idle for more than 180 days but Jamaica would have to compensate EWI 75 per cent of the estimated present value of the business, based on its current and future cash flows projected out for 15 years.

The initial compensation in the April 4 version of the licence was 50 per cent.

How the OUR first ranked the LNG bids:

Rank Bidder Bid Price Fuel Type

1 Azurest-Cambridge 13.90 US c/kWh Natural gas

2 EWI 14.56 US c/kWhNatural gas

3 Azurest-Cambridge 16.35 US c/kWh Heavy fuel oil

4 Energise 18.27 US c/kWh Natural gas

5 Optimal 18.30 US c/kWh Natural gas

6 Energise 21.54 US c/kWh Heavy fuel oil

EWI later revised its price down to 12.88 US cents/kWh.

Jamaica Gleaner;

Electricity Government LNG News

Company with Jamaican connection offers to bail out EWI

May 2, 2014 Webmaster

Chinese Company

A Chinese company based here has approached the Government’s investment company, Jamaica Promotions Corporation (Jampro), with a view to assist with the fallout arising from Energy World International’s (EWI‘s) failed bid to meet all the requirements to construct a booster energy plant on the island.

A usually reliable source told the Jamaica Observer that officials of the Chinese company met with executives of Jampro in New Kingston yesterday and offered to work with the island to get the project off the ground.

“During the meeting with Jampro, the Chinese suggested that they were willing to work with EWI, and vowed that they could secure the necessary financing from China’s Ex-Im Bank to get the 381-megawatt project going,” the source said.

“The Chinese have said that they were also willing to meet with the Ministry of Science, Technology, Energy, and Mining as early as tomorrow (today) to get things started,” the impeccable source said.

Hong Kong-based EWI missed its deadline to pay a performance bond of US$37 million last Thursday.

The total cost of financing the project is US$737 million, of which one per cent — US$7.37 million — had been paid over as part of the bond arrangement.

However, EWI was pushed against the wall after it emerged that the Inter-American Development Bank, upon which EWI was relying to provide non-equity financing for the project, had opted against doing so, citing breaches of Jamaica’s procurement procedures in the award of the contract.

EWI was the preferred bidder to build a power plant that would bolster the national grid by supplying it with 381 megawatts of generating capacity.

The implementation of the natural gas-fuelled project would result in Jamaicans paying less for electricity, the cost of which is prohibitive to some, and has led to widespread stealing of the commodity. Jamaicans pay 42 US cents per kilowatt hour for electricity, and it is believed that when the project is fully implemented the cost will be reduced by approximately 30 per cent.

EWI has committed to deliver electricity to the grid at 12.88 US cents per kilowatt hour.

The latest move by the Chinese company would serve as the fillip that the embattled EWI needs, following countless calls for the company to be rejected as the preferred choice of generating capacity supplier.

The Office of the Contractor General (OCG) had said in a report last year that Energy Minister Phillip Paulwell intervened improperly in the bidding process by including EWI’s proposal after the closure of the bid acceptance period.

Based on that, the OCG said that the bidding process had been compromised and described the Office of Utilities Regulation’s (OUR’s) acceptance of EWI’s proposal as unfair.

Paulwell has been under fire in recent days, with the Opposition Jamaica Labour Party calling on Prime Minister Portia Simpson Miller to relieve him of portfolio responsibility for energy over the EWI affair.

Another source said that Simpson Miller met yesterday with members of the Private Sector Organisation of Jamaica, who suggested that she abandon the entire process of selection and allow a special monitoring committee to handle affairs relating to the matter.

Simpson Miller, the source said, had already laid down some conditionalities to EWI and expects the company to respond to her by Monday.

EWI, the energy arm of Energy World Corporation, is engaged in the production and sale of power and natural gas in several countries.

The company was the second preferred bidder behind United States-based consortium Azurest-Cambridge, but was upgraded last October when Azurest was disqualified after it failed to meet a 15-day deadline to produce a one per cent security bid for the project, which it projected would cost US$690 million to build.

Jamaica Observer;

Electricity Government LNG News

Paulwell issues energy licence, but silent on safeguards

April 17, 2014 Webmaster

Energy Minister Phillip Paulwell

MINISTER of Science, Technology, Energy, and Mining Phillip Paulwell announced yesterday that he has granted Energy World International (EWI) a licence to supply electric power to the Jamaica Public Service Company (JPS), under the terms of the Power Purchase Agreement between the two entities.

However, the minister’s statement that he granted the licence to EWI on Monday did not address the controversial issue of whether critical safeguards, including the US$37 million performance bond, which must be provided by EWI within 10 days of the date the licence becomes effective, was included.

In the release, Paulwell admitted that he had granted a licence to EWI from as early as April 4, but had withdrawn the original one, amended it to provide for some negotiated changes, and reissued it 10 days later (April 14).

Paulwell’s statement said that the second included “a draft implementation agreement between the Government of Jamaica and EWI, outlining commitments of both parties to employ best efforts to ensure the success of this very important project”. However, with no specificity, it could not be ascertained how much attention has been paid to the call by the Private Sector Organisation of Jamaica (PSOJ) and the Energy Monitoring Committee (EMC) for the critical safeguards to be maintained.

Speaking at a Kiwanis Club luncheon just hours before the minister’s press release, PSOJ president, Chris Zacca, pointed out that the 381-megawatt plant to be built by EWI was critical in terms of the retirement of old, inefficient equipment being used by the JPS, which have been contributing to high electricity costs.

Zacca said that he was happy that Paulwell has assured the country that the public/private EMC will remain in place for the duration of the project, as it can play a very important role in providing transparency as the project moves into the implementation stage. However, he criticised the silence of the minister on the questions of ensuring that EWI keeps its promises, including: financing; construction timelines; fuel supply; and, most importantly, the provision of the five per cent, or US$37-million performance bond.

“This provision for posting a performance bond has been in existence from day one of the start of this process. I am advised that the Energy Monitoring Committee also views these safeguards as absolutely necessary, given the lack of information so far provided,” Zacca noted.

Paulwell, meanwhile, promised to meet shortly with the EMC to provide an update on both the licence and the draft implementation agreement before making documents public.

Jamaica Observer;

Electricity Government LNG News

Pressure On Paulwell – Private Sector Groups Demand Minister State Position On Disbanding EMC

April 14, 2014 Webmaster

Pengelley

ENERGY MINISTER Phillip Paulwell is facing demands that he state his position on the future of the Energy Monitoring Committee (EMC), which The Sunday Gleaner yesterday reported is to be disbanded.

Key private sector groupings such as the Private Sector Organisation of Jamaica (PSOJ), the Jamaica Chamber of Commerce (JCC), and the Jamaica Manufacturers’ Associa-tion (JMA) have reacted to the report with fury, stating that they “cannot understand why the minister would be considering disbanding this committee this early in the project”.

The EMC was established by Cabinet as part of its mandate to monitor the bid process for the 360-megawatt generation facility, ensuring that it strictly adheres to the arrangements prescribed by the Office of Utilities Regulation (OUR).

The committee is also charged with ensuring that at the end of the process, the price of electricity provided by the licensee to the Jamaica Public Service Company does not exceed the agreed price per kilowatt hour.

“We would very much appreciate hearing from the minister his reasons for not wanting the committee to pursue its mandate,” the JMA and the JCC said in a joint media release.

The EMC is made up of nine members from the Government, the private sector, and the trade union movement.

The Sunday Gleaner

1 2 3 4 5 6 … 11