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Jamaica to boost LNG imports 50pc by 2020

5 Oct 2017, 10.07 pm GMT

Jamaica to boost LNG imports 50pc by 2020

Kingston, 5 October (Argus) — Jamaica will import an additional 130,000 t/yr of LNG for a third gas-fired power plant to be commissioned in 2020, and for small-scale gas projects, the island's energy ministry tells Argus.

The new 94MW plant will be a revised version of one originally planned at 120MW, and will be built for bauxite refiner Jamalco that will sell excess power to the national grid.

This will bring the island's LNG imports to about 390,000 t/yr by 2020, from a current contracted volume of 260,000 t/yr.

The LNG for the projects will be supplied by US firm New Fortress Energy that has been supplying 60,000 t/yr for a 120MW power plant on the island's northern coast.

New Fortress Energy is already contracted to deliver another 200,000 t/yr for a 190MW power station on the southern coast that is scheduled to be commissioned in 2019.

Both power plants are owned by private-sector power utility JPSCo that is the island's biggest producer and manager of the national grid and distribution networks.

The Jamalco bauxite refinery currently uses heavy fuel oil, and the switch to LNG will reduce production costs and cut pollution, Hong-Kong registered Noble Group asset development director Alec Kushnir told a natural gas conference in Kingston yesterday.

Noble owns 55pc of the refinery, with the balance in the hands of the Jamaican government.

New Fortress is also expected to supply the infrastructure and deliver unstated volumes of LNG for the Mona Jamaica campus of the regional University of the West Indies, which now gets its electricity from the grid.

Further small-scale LNG demand will come from brewer Desnoes and Geddes.

The export-oriented brewer is majority owned by Heineken International of the Netherlands, and is the first commercial entity in the island to convert to gas.

And a pilot project has started to retrofit the island's police vehicles to use gas, the government says.

"When we look at what the new and smaller projects that are planned, we are projecting about 130,000 t/yr more will be needed," an energy ministry official said on the sidelines of the conference. "This volume could be more as there is growing interest in using natural gas for a range of small projects."

The LNG needed for the small-scale projects "could be a significant amount," New Fortress chief executive Wesley Edens told Argus at the conference, saying he could not give firm quantities.

Around 80pc of Jamaica's power is generated by heavy fuel oil, but the government's energy policy projects natural gas firing 26pc of electricity by 2020 and 40pc by 2030, the island's energy minister Andrew Wheatley said.

Jamaica was traditionally one of the largest recipients of subsidized oil from Venezuela under that country's regional PetroCaribe program. But Venezuelan state-owned oil company PdV has slashed PetroCaribe volumes in recent years because its domestic production is declining, and because much of its export portfolio is committed to paying down oil-backed loans.

Many PetroCaribe countries have been forced to buy oil on the open market, while some are shifting toward gas and renewable solar and wind energy.

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