Monday, June 21, 2010
A consortium of foreign and local investors last Friday announced plans for a US$600 million investment in Liquefied Natural Gas (LNG).
Jamaica, however, will not begin using the cheaper source of fuel until 2012, provided the project remains on track.
James Robertson, the mining and energy minister, told a press conference at the PCJ Auditorium in Kingston that the volatility of oil prices on the global market has put in sharp focus the need to diversify the country's energy use.
At the same time, public relations spokesperson for the ministry, Don Creary, told the Observer that the Government had invited bidders to supply the product, which was taken up by a leading LNG producer, Exmar, which was joined by a group of local investors.
"This is a huge project involving foreign direct investment. No Government money is involved, and at the initial stages -- example the pipe laying stages -- there will be significant employment, but I can't give you a figure right away...," Creary said.
The project, according to Creary is expected to transform Port Esquivel into a busy industrial complex. He explained that gas will be supplied to end users including the Jamaica Public Service Company (JPS), bauxite companies, and other large users of electricity, through the use of pipelines.
"Significant, reductions in electricity will be realised. Up to 30 - 50 per cent in the in the short run..." he said.
Cabinet approved the project, according to Creary. and investors were currently in dialogue with Government over taxation and regulatory issues.
At the press conference on Friday with Exmar representatives Nicolas Savery and Ricardo Malabet, it was disclosed that Jamaica had one of the highest energy indices in Latin America and the Caribbean region, placing the country at a competitive disadvantage in international markets.
A PCJ document on LNG listed the revitalisation of the bauxite and alumina industry; reduction in the cost of electricity; a reduction in toxic emission in the atmosphere, as well as job creation as immediate benefits expected when the LNG project gets moving.
The floating storage regasification unit is the technology chosen to deliver natural gas to the different sectors. The infrastructure will comprise a purpose-built jetty, undersea pipeline, if necessary, and onshore buried natural gas distribution to end users.