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Sterling To Arrange Local Financing For LNG Bidder – OUR Sets New Project Deadlines

May 31, 2013 Webmaster

Kevin Richards, Sterling’s vice-president of sales and marketing. – File

Marcella Scarlett, Business Report

Sterling Asset Management Limited has been tapped to arrange US$50 million of financing for joint-venture partners Azurest Partners LLC and Cambridge Project Development Inc, if the companies emerge as the preferred bidder for the LNG-compatible plant, the local investment firm has confirmed.

Azurest-Cambridge is one of five bidders short-listed to bid on the project to develop and operate the power plant to supply the national grid.

The Office of the Utilities Regulation (OUR) announced new timelines for the project on Wednesday for construction of the plant to begin at the end of November and for it to be commissioned two years later in December 2015.

The other four short-listed bids as named by the OUR are Armorview Holdings Limited; Energy World International Limited; Jamaica Public Service Company Limited; and Optimal Energy.

The financing to be arranged by Sterling represents just seven per cent of the plant’s development cost.

Sterling’s vice-president of sales and marketing, Kevin Richards, said the Azurest-Cambridge investment is estimated at US$698 million, including working capital, reserves, capital expenditure, and associated project fees.

The targeted financing mix is 70 per cent debt and 30 per cent equity, with most of the funding to be raised outside of the Caribbean region, said Richards, referring to the entire US$698m project cost.

Sterling says it plans to target local institutional investors for the funds to be raised on behalf of Azurest-Cambridge.

“In the past, there have been a number of acquisitions or new investments by foreigners that did not have any local capital market participation, and we feel that a deal such as this would allow medium- to long-term investors more than sufficient return on investment relative to current market offerings,” Richards said.

Azurest-Cambridge has proposed a 388MW capacity power plant to be mounted on sea barges. The OUR tender is for 360MW.

The partners plan to leverage Azurest’s relationships with major US energy players and financial-services firms “gain easy access to the world’s cheapest supply of LNG,” the partners said in their project summary acquired by

JPS News

Is JPS Telling The Truth On Choice Of Technology?

May 14, 2012 jrobinson

JPS power station in Bogue, Montego Bay. Contributed

The following is a response to the article, ‘Combustion turbines or diesel engines? Choosing the right technology for lowering fuel costs’ by Val Fagan, published in

News

JEP, Wartsila going after 400MW build out

July 25, 2010 jrobinson

JAMAICA Energy Partners (JEP) says it plans to go after the 300-400 megawatts (MW) of installed capacity build out expected in Jamaica over the next five years and has already started discussions with its technology partner — Finnish firm, Wartsila — on how to provide it.

What’s more, Jamaica’s largest private power provider is eyeing expansion into the Caribbean with the Cayman Islands and Haiti topping the list.

JEP plant manager Cecil Gordon (left) and Wartsila Caribbean general manager for services, Marc Tarbox.

“The sky is the limit,” said JEP plant manager Cecil Gordon of expansion plans. “We look at countries that have a need and we are looking at countries like Haiti, because they are poised for development.”

Gordon told the Business Observer that attempts to expand into Cayman were thwarted by the economic downturn but he remains optimistic about regional expansion.

JEP already is expected to deliver an additional 65.5 MW of generated electricity to the national grid by the end of 2011 through its new medium-diesel plant slated for construction in West Kingston, which will bring its total supply to 190 MW. But the demand for an additional 300-400 MW over the next five years projected by the Office of Utilities Regulations (OUR) will largely be met by natural gas-fired plants, in response to a Government initiative to reduce its reliance on petroleum-based fuel for generating electricity.

Wartsila Caribbean general manager for services, Marc Tarbox anticipates little difficulty in converting JEP’s existing plant to burn natural gas, but the cost benefits to be derived from switching the fuel will depend largely on the quality of gas supplied.

“The natural gas grade relates to methan number,” Tarbox explained. “A lower grade gas will require compressor and consumes more internal energy, which means less output to JPS.”

Both Gordon and Tarbox also expressed concern over future supply of liquefied natural gas (LNG) as historical evidence suggests inconsistency.

For its part, however, Wartsila wants also focus on providing back-up to electric grids that are relying more on renewable energy. According to Tarbox, grids require fast responding generating back-ups to replace renewable energy solutions when the natural resource falters.

“The wind does not blow all the time,” he quipped.

Wartsila, a global leader in complete lifecycle power solutions, recently held its Consumer Technical Seminar at the Hilton Kingston Hotel.

Jamaica Observer