Linda Hutchinson-Jafar, Business Writer
Dr. Raymond Wright, consultant to PCJ, says Jamaica may be able to tap Qatar, Malsia or Venezuela for natural gas supplies. - File
Jamaica should not bank on getting liquefied natural gas (LNG) supplies from Trinidad and Tobago anytime in the near future, energy officials have reaffirmed.
There's no spare supplies in Port of Spain, according to president of the state-owned National Gas Company (NGC), Frank Look Kin.
Although government has repeatedly talked about supplies coming from a gas line, which is yet to be built but referred to as 'Train X', there has been no political action to put a formal arrangement in place.
No spare LNG supplies
"There is still the intention to assist in that regard with the supply of LNG, but I think it was made clear to the Jamaicans that there is no spare LNG supplies from Trains 1 to 4 and therefore it will come from a future LNG train in Trinidad ...which is a question mark," Look Kin said at an energy conference last week.
"That's why it's called Train X."
LNG is the end product of processed natural gas. The processing changes the vapour to a liquid and is re-gasified as needed. It can be a feed stock for the manufacture of other chemicals such as propane and butane; used as fuel for heat and electrical power generation; and as fuel for transportation.
Some 80 per cent of supplies from Atlantic LNG Company's four processing trains are exported to the United States, while the other 20 per cent is sold to Spain, the Dominican Republic and Puerto Rico.
Look Kin said NGC has been working with the Petroleum Corporation of Jamaica (PCJ) to tap "other sources of LNG" for Jamaica.
"I think we have had conversations, without going into details, with various LNG suppliers and this is where it is at this particular point in time," he said.
"I think the joint team is waiting for some of those proposals that would come from other LNG producers to supply the Jamaican market."
Other sources
According to Dr. Raymond Wright, PCJ consultant and former boss of the agency, the other sources might be Venezuela, Qatar and Malaysia.
Initially, Jamaica, seeking to reduce dependency on fuel oil for the production of its electricity, had considered Trinidad its best option as a source of LNG, starting 2009.
The two countries signed a Memorandum of Understanding in November 2004 for the supply of 1.1 million tones of LNG per annum over a 20-year period for use by bauxite/alumina company Jamalco and the Jamaica Public Service Company (JPS) power plants.
Jamaica is pursuing plans to lease a floating LNG terminal from a Norwegian firm, and is seeking financing from the European Investment Bank (EIB) to invest in the required LNG pipeline and marine infrastructure at Port Esquivel.
For now, Port of Spain remains one option for supplies of LNG for the floating plant, which replaces plans for a land-based facility that was estimated to cost up to US$400 million.
Look Kin said one of the concerns had been the exorbitant capital costs for the storage and re-gasification facility in Jamaica.
"This, I must admit is one of the challenges the whole industry faces, whether it's upstream or down stream. Essentially people are saying the capital costs have increased in the order of 40 per cent and 50 percent, if not more at times," said the Trinidad official.
"I know what people are saying today is not restricted to an LNG storage terminal or refinery, it's right across the board to contractors and suppliers of raw materials and equipment. The prices have gone up very significantly."
Jamaica's planned switch to a floating plant means its LNG project will cost US$80 to US$100 million, a quarter of the initial cost.
The EIB has agreed in principle to fund the majority of the LNG infrastructure development cost, putting Kingston in a better position to meet its deadline for Alcoa's expansion of the Jamalco plant in Clarendon, a project dependent on available LNG supplies.
The pipeline infrastructure will also lead to main user centres at JPS' Hunts Bay and Old Harbour plants in Kingston and St Catherine.
Earlier this year on a visit to Trinidad, Jamaican prime minister Portia Simpson Miller commented that Kingston's plans to add value to the earnings from bauxite have been stymied for decades because of the high energy cost for conversion to alumina and aluminium.
Dr. Raymond Wright, PCJ consultant, says Jamaica is heavily dependent by over 90 per cent on imported fossil fuels for its energy economy.
Also speaking at the Port of Spain energy conference, Wright said Jamaica's oil bill would total US$1.5 billion for 2006, representing between 17-18 per cent of it's GDP and between 72-74 percent of earnings of export merchandise.
Jamaica consumes over 26 million barrels of oil a year Ñ with bauxite, power and transport accounting for well over 90 per cent.
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