Jamaica could take approximately 10 per cent of the 125,000 tonnes a year Alutrint aluminium smelter being planned by the Trinidad and Tobago government.

But, officials here say that Kingston would like the deal to be part of a broader package under which it provides alumina for the plant and Port of Spain supplies it with LNG to fire electricity generators here.

"We see the whole thing as a package," said Dr. Carlton Davis, the secretary to the Jamaican Cabinet and chairman of Clarendon Alumina Production (CAP), the vehicle used by the island's government to hold its 50 per cent in a 1.3 million tonne alumina refinery it owns with the U.S. metal giant, Alcoa.

Alutrint, as currently configured, would be built at La Brea on Trinidad and Tobago's southwest coast as a joint venture between the Trinidadian government and 9the Sural Group, a Venezuelan manufacturer of pure aluminium and alloy rods - which would be one of the downstream activities of the Alutrint facility.

The Alutrint smelter, to be built with Chinese technology and projected to cost between US$500 million and US$700 million, is separate from another plant of nearly twice its size, proposed by Alcoa for Trinidad, the English-speaking Caribbean's only energy surplus country with reserves of oil and gas.

Predicated supply

Alutrint, however, is largely predicated on Jamaica supplying the smelter with about 250,000 tonnes of alumina a year, much of which would be expected to come from Aloca/CAP refinery, whose capacity is to more than double under a US$1.5 billion expansion proposed by Alcoa.

But that expansion, projected to be ready by 2010, is itself predicated on affordable energy - an issue that the Jamaican government is attempting to address by converting from oil to natural gas-fired electricity plants.

The Alcoa refinery would have a 285 megawatt electricity genera-ting capacity, enough to run the facility and providing a surplus for sale to the national grid, an important part of the strategy for Jamaica to expand its electricity production and rising demand rapidly whittles away at surplus capacity.

More than two years ago, Kingston and Port of Spain signed a memorandum of understanding, in which the Trinidadians undertook to supply Jamaica with LNG and to be a partner in a storage and regasification facility here. This, at the time, was viewed as an important development in the context of the emerging single market and economy in the Caribbean Community (Caricom), of which Jamaica and Trinidad and Tobago are members.

It is against that backdrop that Cabinet secretary Davis, one the world's leading experts on the bauxite/alumina/aluminium indus-tries, sees the potential LNG/alumina deals between the two countries.

"We think that this would be a tremendous blow for Caribbean economic integration," Davis told the Financial Gleaner.

Despite the Kingston/Port of Spain MoU, doubts have arisen recently over whether the Trinidadians, with annual gas output of about 18 million tonnes a year, will meet Jamaica's proposed need of 1.15 million tonnes.

Sunk wells

Recently sunk wells that appeared promising have provided disappointing results, and Trinidad and Tobago and Venezuela are yet to work out a sharing mechanism for a substantial gas find in the narrow gulf separating the two countries. Trinidadian officials have been signalling that these developments could place pressure on the country's capacity to meet new supply undertakings, especially under what Port of Spain sees as concessionary terms as implied by the MoU.

"We are optimistic," Davis said. "This is an important regional development."

At the same time Jamaica, which has shelved plans for a land-based LNG storage and regasification plant in favour of cheaper floating facility, is exploring alternative sources for natural gas. And Davis suggested that things have to move quickly.

"It is not only about the Jamalco refinery expansion," he said. "It is very critical that we expand electricity generation to meet the growing domestic demand. We can't wait until we begin to have blackouts. And we have to produce at the cheapest cost."

business@gleanerjm.com