Anthony Wilson, Business editor, Trinidad Guardian
Minister Phillip Paulwell. - RUDOLPH BROWN/CHIEF PHOTOGRAPHER
CONTRACTORS FOR Jamaica's liquefied natural gas (LNG) terminal and storage facility at Port Esquivel should have been selected last June with construction to start the middle of this year, but haggling is still taking place over whether and at what price LNG can be sourced from Trinidad.
The importance of this was highlighted yesterday with the statement coming from ALCOA that the expansion of its US$1.2 billion Jamalco alumina refinery in Clarendon was dependent on a successful outcome of the Trinidad gas talks.
"We are in dialogue with Trinidad and Tobago," Phillip Paulwell, Minister of Commerce, Science and Technology told Trinidad journalists in an interview in Kingston last week. "We are awaiting finalisation of the agreement for the supply of liquefied natural gas and we have established a framework whereby both the National Gas Company of Trinidad and Tobago and the Petroleum Corporation of Jamaica are pursuing this project fifty, fifty. The last limb of the project is the ascertainment of the date whereby the gas will be available to Jamaica. While we are doing that, we are doing all of the preliminary work. So we are still on track and we are hoping that it will be successful."
Jamaica announced in December 2004 that it had reached an agreement to import 1.1 million tonnes of LNG per year from Trinidad and Tobago. The agreement requires the construction of a $250 million LNG regasification terminal in Jamaica.
INDUSTRIAL DEVELOPMENT
The project is regarded as pivotal for the island's industrial development as the understanding was that Trinidad would be supplying gas at attractive rates similar to that which obtains in its domestic market. This would lower Jamaica's energy bill and facilitate the expansion of the energy-hungry alumina refineries.
The sticking point in the negotiations with Trinidad is officially that Trinidad is unable to find enough gas to supply Jamaica and meet all the other commitments of its ambitious industrial development programme. However, a critical sticking point is over pricing.
"We have an agreement (on pricing) that will be reviewed once the gas is available," the minister said. "I think that it would be more appropriate to await the review, then we would be able to share the various components with you."
The challenge for Trinidad is that the price Jamaica wants the gas for would be a fraction of what it can get on the United States market where prices reached record levels recently.
"I think what we now need is to be assured of the timeline for the delivery or receipt of the natural gas and once we have that all other things will fall in place," Minister Paulwell said. Talks are continuing between Kingston and Port of Span and the matter has not been referred to the Caribbean Court of Justice as had been reported.
Andrew Green contributed to this story.
