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.
