Shop Now - RezynTech
0 $0.00
Get Quote

Tag: Hong Kong

SolarBuzz Jamaica > Blog Classic > Hong Kong
Electricity Government LNG News

Bicknell Reserves Comment On EWI

May 2, 2014

 

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

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

No Defying OUR – Paulwell To Grant 381MW Licence To EWI, Cites Fear Of Court Action

April 3, 2014

Energy Minister Phillip Paulwell. – File

Energy Minister Phillip Paulwell yesterday revealed he has no intention of going against an Office of Utilities Regulation (OUR) recommendation to grant a licence to Energy World International (EWI).

Paulwell, who returned to the island from St Lucia yesterday afternoon, said “once the OUR recommends to me a licence, I sign”.

He added: “They have taken me to court before, I won’t risk that again.”

Said Paulwell: “They have submitted to me, since I returned as minister (in January 2012), over 120 electricity licences, I have signed every single one of them. I am going to my desk now and I report in the morning.”

The OUR last Wednesday recommended that EWI be granted a licence to supply 381 megawatts of generating capacity using natural gas as the fuel source.

But several voices have come out in opposition to the licence being issued to the Hong Kong-based company, with the Office of the Contractor General, members of civil society, the Energy Monitoring Committee (EMC), and the private sector urging Paulwell to proceed with caution.

However, the minister yesterday indicated he has a legal obligation, under the OUR Act, to grant the licence.

“I am a creature of the law and rules, and there are certain rules that govern my operation and one of which is that you have a body called the OUR, and there are some regulations, and once they recommend to the minister a licence, it would be a serious matter to go against them,” Paulwell said.

LACK OF INFORMATION

In the meantime, the EMC said it remained concerned about the lack of adequate information provided by the EWI to support its application for a licence to construct the plant.

However, Peter Melhado, co-chair of the EMC, said the OUR was the body with the authority to make such recommendations and the committee has no choice but to accept it.

Melhado said the EMC would now turn its attention to ensuring that EWI adheres to all aspects of the licence.

“Our focus will definitely be on certainly commenting if we see any variant between … what is in the licence and the PPA (power purchase agreement) … and if there are any breaches,” he said.

Jamaica Gleaner;

Electricity Government JPS LNG News

Power Trinity – Companies Collaborate To Offer Best Bid In The Megawatt Project

August 9, 2013

Kelly Tomblin, CEO of the JPS.

Kelly Tomblin, CEO of the JPS.

AS THE Office of Utilities Regulation (OUR) opened bids yesterday for the much-anticipated 360-megawatt electricity-generating project, it was revealed that three major companies have joined forces seeking to become the preferred bidder.

And in a late development yesterday, the Jamaica Public Service Company (JPS) said it will be partnering with three local entities in response to the OUR’s request for proposals for the procurement of new baseload generating capacity.

“While JPS is not submitting an independent bid, we are pleased to partner with other bidders to ensure that new power generation is added to the grid. We also plan to work with our partners to continue to bring much-needed fuel diversity to Jamaica,” said Kelly Tomblin, JPS president and CEO.

In its news release yesterday, the JPS did not specify the companies that it would be partnering with, but only three entities have established a limited-liability company, called Energised Jamaica Limited, to bid for the project. The companies are Amourview Holdings Limited, Tank-Weld, and Mussons Jamaica Limited.

Energised Jamaica Limited is proposing to establish a 360-megawatt dual-fuel selective-cycle reciprocating power-generation plant, using number-six heavy fuel oil and natural gas. If successful, the company will be spending US$586.7 million to set up the plant.

Nigel Davy of Energised Jamaica Limited told

Electricity Government JPS LNG News

Power Trinity – Companies Collaborate To Offer Best Bid In The Megawatt Project

August 9, 2013

Kelly Tomblin, CEO of the JPS.

Kelly Tomblin, CEO of the JPS.

AS THE Office of Utilities Regulation (OUR) opened bids yesterday for the much-anticipated 360-megawatt electricity-generating project, it was revealed that three major companies have joined forces seeking to become the preferred bidder.

And in a late development yesterday, the Jamaica Public Service Company (JPS) said it will be partnering with three local entities in response to the OUR’s request for proposals for the procurement of new baseload generating capacity.

“While JPS is not submitting an independent bid, we are pleased to partner with other bidders to ensure that new power generation is added to the grid. We also plan to work with our partners to continue to bring much-needed fuel diversity to Jamaica,” said Kelly Tomblin, JPS president and CEO.

In its news release yesterday, the JPS did not specify the companies that it would be partnering with, but only three entities have established a limited-liability company, called Energised Jamaica Limited, to bid for the project. The companies are Amourview Holdings Limited, Tank-Weld, and Mussons Jamaica Limited.

Energised Jamaica Limited is proposing to establish a 360-megawatt dual-fuel selective-cycle reciprocating power-generation plant, using number-six heavy fuel oil and natural gas. If successful, the company will be spending US$586.7 million to set up the plant.

Nigel Davy of Energised Jamaica Limited told

Electricity Government JPS News

Four bidders for new power plant JPS among entities seeking to build new facility

April 25, 2013

THE Office of Utilities Regulations (OUR) is to partner with the National Contracts Commission to negotiate actively with four interested bidders for the building of a new power plant and present a recommendation to the Government in 30 days.

Minister of Science, Technology, Energy and Mining Phillip Paulwell, who made the announcement during his contribution to the 2013/14 Budget Debate at Gordon House in Kingston yesterday, said the OUR is to get additional powers of monitoring, evaluation and enforcement, similar to those it has over the telecommunications sector. “Legislation will be brought to Parliament during this year to amend the current Act,” he said.

Minister of Science, Technology, Energy, and Mining Phillip Paulwell makes his contribution to the 2013/14 Budget Debate at Gordon House in Kingston, Turn to POWER on Page 4 yesterday. (PHOTO: LIONEL ROOKWOOD)

In 2010, the OUR went to tender for 480 megawatts (MW) of generating capacity, and the Jamaica Public Service (JPS) was the sole bidder at the time and was awarded the right to construct a 360 MW combined cycle plant. It was contemplated that the Government

would be responsible for securing the supply LNG of fuel for the new plant, through the Liquefied Natural Gas project.

However, the OUR, on February 1 this year, informed the JPS and its shareholders that it had terminated the request for proposal (RFP) process in relation to the 360-MW project. The OUR said it ended the process after JPS missed a third deadline on January 30 to complete the requirements under the RFP for the 360-MW project and had requested a 30-day extension.

The JPS said the project scope changed significantly since 2011, when it was granted approval to proceed with construction of the plant saying its role initially was simply to construct the plant, but late last year the company was asked to take on the additional responsibility of identifying a supplier and managing the process of procuring the LNG.

A subsequent decision by the OUR to accept unsolicited proposals from the JPS and other companies, this year,

saw five entities presenting unsolicited proposals for 14 discrete projects.

Yesterday, Paulwell said this development was “a big turnaround from 2010, when there was a sole bidder, signifying confidence in this administration, its policies and regulatory framework”.

He said that following evaluations by international consultants Mott McDonald, which contemplated among other factors the firmness of the proposal, the overall price and expected impact on retail electricity rates of the 14 projects submitted, four were rejected because the information was incomplete.

The energy minister said, although 10 were screened for detailed technical and comparative economic analysis, of the 10, the OUR determined that three entities made the pitch. Those include Amorview/Tankweld, which presented a

232-MW project proposed for Old Harbour and a 122.4-MW project proposed for Caymanas; JPS, which presented proposals for a 323-MW and a 350-MW combined cycle plant, both proposed for Old Harbour; and Azurest/ Cambridge, which presented a proposal for a 388-MW plant mounted on a barge.

Paulwell said all three proposed the use of natural gas.

In the meantime, he said subsequent to the OUR receiving and assessing those proposals, the Government has since received another unsolicited proposal from a Hong Kong company, proposing to build an LNG receiving terminal and power plant and to supply LNG from its own gas fields. That company has proposed a combined cycle gas-fired 360-MW power plant adjacent to the LNG hub terminal.

“After several stops and starts, today I can speak with certainty that a positive change is about to come to the supply of electricity in Jamaica. It is essential that we begin construction of new generating capacity this year; there have been too many delays, and we can no longer live with these high electricity prices,” Paulwell told the House.

Read more:

SolarBuzz © 2023. All Rights Reserved.