Old Harbour Jamaica Archives - SolarBuzz Jamaica

JPS, New Fortress Pursuing Separate Parts Of LNG Project

January 25, 2016 Webmaster

The oil-fired JPS power plant in Old Harbour Bay, St Catherine is to be replaced with a gas-fired plant.

The announcement of an agreement between Jamaica Public Service Company (JPS) and a Chinese firm is expected this week for the construction of the new energy plant at Old Harbour.

JPS and American company New Fortress Energy are executing separate projects at Old Harbour – the Jamaican utility company is building a new 190 MW plant, while Fortress is financing and developing the gas infrastructure to supply the plant with LNG.

Together, the projects are estimated at around US$500 million.

JPS said it will have no ownership in the gas infrastructure project nor contribute to the cost of developing it, but will solely be a client of New Fortress, which will build its pipeline to connect to the JPS plant. The same arrangement applies to the gas infrastructure under development by New Fortress in Montego Bay, which will feed gas to JPS’ Bogue plant.

The utility company said previously that the 190 MW combined cycle plant at Old Harbour is expect to cost close to US$300 million.

The name of the Chinese contractor will be disclosed only after the deal to develop the plant is finalised, JPS said. The utilitycompany had previously chosen Abengoa to develop the plant only to be embarrassed when the Spanish firm filed for bankruptcy protection in its home country just days later.

JPS is also in final negotiations with General Electric (GE) as the primary equipment supplier for the Old Harbour plant.

“JPS is currently finalising the agreements with both GE and the ‘EPC’ contractor and coordinating the start of this new generation facility with the completion of an associated LNG facility that will be built to provide gas. These two projects will total over US$500 million and begin operation in early 2018 with full commercial operation by the middle of 2018,” said JPS via email.

EPC is a categorisation, which stands for ‘engineering, procurement and construction’ contractor.

The plant’s advance GE turbines will utilise cleaner burning natural gas, replacing the heavy fuel oil currently used at Old Harbour, and will be able to integrate increased solar, wind and hydro resources as Jamaica moves towards producing more electricity from renewable resources.

“GE will provide four turbines – three gas turbines and one steam turbine the three heat recovery steam generators, the four electrical generators and the major controls,” said JPS.

Once the new Old Harbour plant is built, the current structure will be dismantled, and the property will resort to brownfield status, according to JPS spokeswoman Winsome Callum.

New Fortress is negotiating separately with the Electricity Sector Enterprise Team regarding its gas project, Callum said.

JPS has spent some US$4 million so far in preparing for the upgrade over the past 24 months.

The Gleaner

Electricity JPS LNG

JPS Closing Negotiations With Alternate Bidder For 190mW Project

December 18, 2015 Webmaster

The Jamaica Public Service Company Ltd (JPS) has made good on its pledge to activate alternative plans to ensure the execution of the proposed 190-megawatt power plant at Old Harbour in St Catherine.

Yesterday, the light and power company said it was now in the final stages of negotiations with an alternate bidder to provide engineering, procurement and construction services, for the plant to be built in Old Harbour, St Catherine.

The original preferred bidder, Abengoa, was selected through a competitive tender process, with the assistance of two international consulting firms, AMEC Foster Wheeler and Power Engineers Collaborative LLC.

In November, the Spanish firm filed for protection from creditors – a possible first step towards filing for bankruptcy.

With the announcement of Abengoa’s financial challenges, JPS has been closely watching the progress of the Spanish company’s financial-restructuring plan.

However, Abengoa has not been able to provide the financial assurances required as a normal part of the process of confirming a bidder.

Kelly Tomblin, JPS president and chief executive officer, said: “We are very close to concluding key terms with one of our alternate bidders. Throughout this time, we have been working closely with the Electricity Sector Enterprise Team (ESET), so they are embedded in the process.”

Commenting on the importance of the project to Jamaica, Tomblin said: “We want to make it very clear that this project is not, and has never been, in danger. JPS shareholders (EWP and Marubeni) are the ones who have committed to bringing equity to the project, and there is keen interest and indicative commitment from a variety of financing sources. I want to make it very clear that the bidder on this project is not the financier. They are an engineering, procurement and construction firm, who will be subject to significant oversight and potential penalties for non-performance. We need to clear up any confusion on their role.”

The Gleaner

Alternative Energy Electricity Jobs JPS LNG News Oil

Abengoa Says Old Harbour Project Will Employ Hundreds

December 2, 2015 Webmaster

The oil-fired JPS power plant in Old Harbour Bay, St Catherine is to be converted to LNG.

Spanish firm Abengoa SA has revealed the value of the upgrade and employment prospects for the 190MW power plant project amid pre-bankruptcy filings in its home market.

“The contract for the plant, which will be powered by natural gas and cooled by seawater, is worth more than US$200 million,” said Abengoa in a release.

The engineering and renewable energy firm was selected as preferred bidder by Jamaica Public Service Company (JPS), and the parties are in the process of finalising the contract for the LNG-fired power plant. JPS has said the full project cost would be closer to US$300 million.

Abengoa has about four months in which to secure deals with its creditors and restructure its debts if it is to escape full bankruptcy. JPS has said it is not ready to give up on its preferred bidder just yet, but is monitoring the situation.

Abengoa said it will be responsible for the design, engineering and construction work of the plant that will replace an existing fuel-oil facility and is expected to “create between 300 and 500 jobs during the construction phase”.

JPS wants to decommission the existing fuel-oil plant and move to a natural gas facility to create a cleaner, efficient and more reliable source of power, added Abengoa.

The more than 40-year-old Old Harbour plant remains one of the least energy efficient in the island and its upgrade would form part of the Jamaican Government’s drive to increase cleaner forms of fuel. Jamaica aims to increase renewable energy reliance to 20 per cent of the energy output within the medium term.

SEAWATER COOLING SYSTEM

“The plant will use a seawater cooling system that returns the warm water without adversely impacting the environment. Abengoa’s design will use the existing infrastructure as much as possible, requiring less power and improving the overall output of the plant,” said the Spanish firm in late November, adding that the project would extend Abengoa’s experience in turnkey combined cycle projects to the Jamaican market.

The company informed that it filed for insolvency protection on November 25 before the Mercantile Courts of Seville. The company also indicated that it would continue negotiations with its creditors with the objective of reaching an agreement that ensures the company’s financial viability, “under the protection of Article 5 of the Spanish Insolvency Law”.

The company recorded a €194 million net loss attributable to its parent over nine months ending September 2015 on revenues of €4.87 billion. It holds €6.2 billion in total debt while its earnings before interest tax and amortisation totalled €1.3 billion or 4.5 times net leverage.

Abengoa’s other major combined-cycle projects include the 640MW plant in Centro Morelos, Mexico, and the 440MW combined cycle plant in Portland, Oregon, United States, currently under construction. More recently, Abengoa was awarded two combined cycle plants in Mexico – Nuevo Pemex 680MW, and Norte III, 924MW.

The Gleaner

Electricity JPS LNG News

ESET, JPS Not Worried By Bankruptcy

November 29, 2015 Webmaster

LIGHT AND power providers, the Jamaica Public Service Company (JPS) said yesterday that it is getting independent advice from its lawyers on whether to proceed with a contract with Spanish firm Abengoa to construct its power plant at Old Harbour, St Catherine.

Kelly Tomblin, the chief executive officer of JPS said yesterday that its shareholders held a conference call with Abengoa to discuss the way forward.

Abengoa’s chief executive Santiago Seage resigned yesterday after it emerged the Spanish renewable energy giant was close to bankruptcy.

The JPS, with the assistance of AMEC Foster Wheeler, a consultancy firm, selected Abengoa whose package consists of general electric combined cycle frame 6B gas turbine. The light and power company was in the process of negotiating a performance contract when the matter of the bankruptcy came to light.

“We were never going to enter into a performance contract until we had some assurance about their financial abilities,” Tomblin said.

She said that December 9 was the deadline for Abengoa to satisfy JPS of its ability to undertake the project and hinted that the light and power company is getting ready to move beyond Abengoa.

“Their problem is that they have some debt coming due but they don’t have the cash to pay. They are going to try to utilise their assets and do other things but that takes too long so we won’t be able to wait out that,” Tomblin said.

The Electricity Sector Enterprise Committee, ESET, said that while it is watching the developments, it is not totally concerned at this point.

Profesor Alvin Wint, a member of the ESET, said that in addition to Abengoa, other entities had submitted detailed bids to construct the power plant and they would be in line to be considered to take on the project.

“We will be requiring that they move quickly and if they need to go to a plan B they go quickly,” Wint said.

Both major shareholders of JPS, Marubeni and Korea East West Power Company Limited have committed to each inject up to 50 per cent of the approximately US$990 million equity that is required to develop the 190 megawatt power plant by year end.

The JPS intends to raise approximately US$210 million in debt funding to help finance the project.

The Gleaner

Alternative Energy Electricity Energy Saving JPS News

Pot Can’t Call The Kettle Black, JPS Says It Won’t Jump The Gun On Abengoa Bankruptcy Proceedings

November 26, 2015 Webmaster

Although Abengoa, the Spanish company selected as the preferred bidder to build a major power plant in Jamaica, has initiated steps that could lead to a bankruptcy declaration, Jamaica Public Service Company CEO Kelly Tomblin is not yet ready to call it quits on the multinational corporation.

Reacting to news of the bankruptcy proceedings initiated by Abengoa, Tomblin said she was monitoring the situation of the Spanish renewable-energy company.

It was only last week that JPS announced Abengoa as the preferred bidder to build the 190-megawatt combined-cycle plant in Old Harbour, St Catherine.

Despite fears that Abengoa may not be able to fulfil the requirements of the bid, given its precarious financial situation, Tomblin is holding out hope that the company will be able to make good on its financial obligations in relation to the bid.

“We have been monitoring the situation for some time. We have backup plans, but we have to wait and see what Abengoa shows us. But pot can’t call kettle black because JPS, as you know, has had its own financial difficulties, and we are just now emerging from those, so we know what it’s like, so we want to make sure that we don’t overreact,” Tomblin told The Gleaner last evening.

In the event that Abengoa folds completely, Kelly Tomblin pointed out that JPS has several alternatives.

“There are other vendors. We have many vendors who were poised to build the plant, so if, in fact, Abengoa can’t show, then other people can build the power plant. As you know, we have shareholders who have deep expertise, but we don’t want to jump the gun. Of course, Abengoa will have to give us financial assurance, but, again, pot can’t call the kettle black. It wasn’t very long ago that JPS, too, was facing insolvency problems,” she said.

Energy Minister Phillip Paulwell, in reacting to the news, said there was no need to panic and that JPS should be given the space to continue the procurement process.

When asked if the situation vindicates him in respect of the Energy World International (EWI) bid, Paulwell said, “There will be vindication when the gas is here because that, for me, is the most important aspect.”

Paulwell was in charge of overseeing the Government’s 391-megawatt project, which awarded a bid to EWI, a company which faced financial woes, leading to questions about its ability to deliver on the bid. This was before responsibility for the project was handed over to the Vin Lawrence-led enterprise team.

Now, with news of Abengoa’s bankruptcy filing, Jamaica’s renewable-energy plans may be delayed yet again.

Abengoa’s latest financial woes sent shockwaves through the banking sector and financial markets in Spain yesterday, fuelling concerns that the country’s lenders may be left with heavy losses.

According to international media reports, Abengoa has been having financial challenges from as far back as 2013, when Spain instituted energy reforms, which reduced subsidies to renewable-energy providers. This affected Abengoa’s capital base significantly and further exacerbated its pile-up of debt.

The Financial Times has said that a possible default by Abengoa could count as the largest bankruptcy in Spanish history, given that as of September, Abengoa carried gross debt of £8.9 billion.

The filing for preliminary creditor protection yesterday came after a potential investor cancelled plans to inject £350 million into the company.

While he could not comment on questions of whether due diligence was done on the Abengoa bid, Private Sector Organisation of Jamaica CEO Dennis Chung said news of the filing does not mean the company will go under, as bankruptcy proceedings often give a company an opportunity to rebuild.

“I couldn’t comment on due diligence. I have to believe that proper due diligence would have been done, so that question should be put to the person who actually did the due diligence,” Chung said.

The Gleaner

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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

Government JPS News

Consumers Paying For 17% Of JPS Losses Says Paulwell

November 13, 2012 jrobinson

Energy Minister Phillip Paulwell

Power provider Jamaica Public Service Company (JPS) currently passes on to its consumers 17 per cent of the costs of its inefficiencies – including illegal extraction of power – valued at billions of dollars, says Energy Minister Phillip Paulwell.

But the Government is determined to have those inefficiencies, including heat losses, decreased even before the liquefied natural gas plant to be constructed by the JPS at Old Harbour, St Catherine becomes operational in two years or so.

“Currently, the JPS passes on 17 per cent of its inefficiency to all of us,” said Paulwell, the minister of science, technology, energy and mining.

“Some of that inefficiency is as a result of theft and we have to solve that problem. There are some discussions now taking place to deal with that,” said the minister addressing an executive breakfast meeting organised by First Global Bank at the GraceKennedy headquarters in Kingston on Friday.

“We believe that there is more that can be done about theft, and when we looked at the data it is not only downtown or my constituency (of East Kingston and Port Royal). We see some substantial numbers uptown and it is not fair. It is immoral for us to be paying for that.”

mcpherse.thompson@gleanerjm.com

News

JPS: LNG still the best option to oil

May 9, 2012 jrobinson

THE Jamaica Public Service (JPS) has reiterated that Liquefied Natural Gas (LNG) is the preferred option as Jamaica explores alternatives to electricity generation fuelled by oil.

Valentine Fagan, the managing director of South Jamaica Power Company, made the pronouncement while addressing the weekly Jamaica Observer Monday Exchange. That company was set up by the JPS to preside over the construction of a 360-megawatt plant in Old Harbour, St Catherine. According to JPS, that facility, which is slated to come on stream in December 2014, will replace the inefficient and aged Old Harbour power-generating plant.

“There is really not much difference in terms of coal versus LNG, just that it is possible to bring on the LNG plant much faster. Coal plants take five years for construction, in addition to the many environmental issues,” said Fagan as he addressed reporters and editors at the Observer’s Beechwood Avenue headquarters.

“If we don’t add capacity, and if we assume modest growth in the economy, we would have breached the 25 per cent reserve margin, and would find it difficult to supply peak demand. This would result in widespread outages,” Fagan added.

For several months, some stakeholders in the energy sector have been questioning moves by the JPS and the Government to introduce LNG. Some of the observers have suggested that coal would be a less-expensive option. Others have suggested that LNG prices will begin to skyrocket, and have also indicated that Jamaica