AS SPECIAL adviser to the Prime Minister on energy matters, Anthony Hylton's recent update on a project to diversify Jamaica's reliance on oil for energy into Liquefied Natural Gas (LNG) imported from Trinidad was most welcome.
Having attended the recent inter-sessional meeting of CARICOM Heads, Mr. Hylton brought back news that Trinidad would fund 50 per cent of the cost of a final feasibility study and consider making an equity investment in the venture which is estimated to cost US$250 million and to come on stream in 2006.
In a late development, however, Trinidadian Prime Minister Patrick Manning is reported to have said that "many CARICOM states do not understand the intricacies of his country's energy sector... and were making assumptions that were not based on facts".
Recent fluctuations in the cost of Brent crude, driven as high as US$32 a barrel because of a possible war with Iraq and recent political upheavals in Venezuela, have lent urgency to the project. Jamaica imports some 26 million barrels of oil annually and even with preferential price concessions from Venezuela and Mexico, this represented an import bill of US$635 million in 2002 which could rise to about US$800 million in 2003.
The plan is to establish an LNG unloading terminal in Jamaica to be part of a large tank storage facility or GASPARK. Electricity from LNG will be generated there and fed into the national grid. Also, gas-intensive industries like steel, fertiliser and petrochemicals can be established in the GASPARK. Based on pre-feasibility studies, Mr. Hylton estimates that the plan will save up to 25 per cent of the present import bill for oil.
Trinidad is an ideal partner in such a venture, not only because it is a CARICOM member state, but because of its pre-eminent international position in the production of LNG. Trinidad now provides 40 per cent of US imports of LNG, more than Algeria, the next biggest supplier. In the process, natural gas is cooled to -260 degrees Fahrenheit, enough to change it to a liquid from a vapour, at the same time shrinking the gas to one-six-hundredths of its original volume, allowing it to be stored in ships and land tanks. When the fuel is needed, it is converted back to gas.
We presume that the technology involved is now so developed as to make the use of LNG safe and price-competitive.
While Mr. Hylton says he is standing by his original statement regarding an offer of concessionary rates for natural gas from Trinidad, at this early stage there is both time and room for clarification. This natural gas hiccup must surely subside.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
