(Jamaica Gleaner) The Sunday Gleaner has now confirmed that the Portia Simpson Miller-led administration will announce plans to abandon its long-stated intention to introduce liquefied natural gas (LNG).
After years of planning and millions of dollars in expenditure, the Simpson Miller administration has decided that it just cannot afford the cost of setting up the infrastructure and other requirements for the introduction of LNG.
Energy Minister Phillip Paulwell is scheduled to make that announcement early next month, but government sources say a new plan could be announced at that time as Paulwell continues his desperate push to reduce electricity bills.
“I can say that the numbers are not adding up,” a government source told The Sunday Gleaner late last week.
“As you would have suspected, we knew this was a likely outcome for some time now and had begun to support the offtakers (electricity and alumina producers) to rev up plans ‘B’ and ‘C’, and they are so doing,” added the source who asked that his name be withheld.
It is expected that plans ‘B’ and ‘C’ would see the Jamaica Public Service Company (JPS) being allowed to establish the LNG infrastructure and source the gas for the multibillion-dollar plant it plans to construct in Old Harbour, St Catherine.
The JPS would also sell LNG to the alumina producers which have long argued that the high price of electricity in Jamaica makes production uncompetitive.
“We have long told the Government that the introduction of LNG should be private sector-driven, but the People’s National Party administration before it lost the 2007 general election was adamant that it should be state-controlled and the Bruce Golding-led Jamaica Labour Party government followed that path,” said a source in the energy sector last week.
“If this was a private sector-led drive, EXMAR would have started construction in 2009 and, by this year or early next year, the country would have LNG and lower electricity bills,” added the source who asked not to be named.
Last year, The Gleaner first reported that a November 2010 report by a World Bank-recommended team of consultants suggested that the Government put on hold its plan to introduce LNG.
uncertainty with project
At the time, the consultants stated that there was ambiguity and uncertainties surrounding several aspects of the project which could make it a financial disaster for the Government.
According to the consultants, a focused economic and financial feasibility study should be completed quickly before a final design specification for the Floating Storage and Regasification Unit and pipeline system.
The consultants also warned that the Government could be exposed to great financial risk for future gas purchase.
But then Energy Minister James Robertson and members of the LNG Steering Team scoffed at the consultants’ report as they responded to the queries.
“That (consultants’) assessment report raised several valid questions of the project, for which comprehensive answers were provided,” Robertson told The Gleaner at the time.
